The nation is under rising pressure due to the sluggish world economic environment, and the country is expected to continue to open up and deepen reforms to maintain growth, an official noted Tuesday at the annual Summer Davos held in North China's Tianjin.
"The growth pressure is increasing because the global economy is slowing down and the global economic recovery continues to be weak … In this context, China's development theory on innovation, coordination, greenness, opening-up and sharing is very important," Vice Finance Minister Zhu Guangyao said at a seminar of the Summer Davos.
China will continue to open its market to the world as the country's opening-up reform promotes productivity, Zhu said.
The country needs to find a genuine balance between demand and supply-side structural reform, Zhu said, noting that "without supply-side reform, it is difficult to talk about sustainable development."
However, in the short term, growth needs to rely on demand, while over the medium to longer term, structural issues must rely on supply-side reform.
"Chinese policymakers should realize that the country really needs to support growth from a longer-term perspective. That means there are five tasks involving reform to be undertaken, including reducing overcapacity, stabilizing leverage and cutting inventories in the property sector," Peking University professor Huang Yiping, a member of the monetary policy committee of China's central bank, told a session at the Summer Davos.
Overcapacity can be dealt with quickly if companies have effective investment projects, Jia Kang, president of the China Academy of New Supply-side Economics, told the Global Times in an interview on the sidelines of the economic forum.
"Therefore, the key to reducing capacity is to fully employ the market mechanism to get rid of inefficient capacity instead of merely considering what is excess capacity," Jia noted.
