SOE reform, overcapacity cuts will be focus of policymakers during 2017: experts
Economic growth and restructuring in China made strides in 2016, supported by local governments' efforts such as industrial upgrading, cutting excess capacity and nurturing new driving forces, experts said.
The comments came after local governments reported on their economic development in 2016 in recent days.
At least 13 provincial-level regions had released GDP growth rates as of Sunday. Among these, Southwest China's Chongqing Municipality led the country in economic growth with expansion of 10.7 percent year-on-year, followed by North China's Tianjin Municipality, Central China's Hubei Province and Central China's Hunan Province, which had GDP gains of 9 percent, 8 percent and 8 percent, respectively, according to media reports.
Chongqing has led the country in economic development during the past 11 quarters.
Active transformation of the economic growth model contributes largely to Chongqing's expansion, Niu Li, director of the Macroeconomic Research Office at the State Information Center, told the Global Times on Sunday.
The city has taken over many industries from other provinces since the global crisis [in 2008], including such sectors as electronics and vehicles, which developed quickly and became driving forces for the city's growth, Niu said.
He noted that "other provinces in Southeast China are seeking relatively fast industrial transformation and nurturing new driving forces."
But for some northern provinces that live on traditional energy resources like North China's Shanxi Province and provinces in Northeast China, "they are enduring hardship because the prices of raw materials have slumped since the second half of 2014 and industrial overcapacity has caused many problems such as unemployment," Niu noted.
Shanxi's economic expansion is estimated to have reached 4.5 percent in 2016, 1.5 percentage points below the forecast, Governor Lou Yangsheng told a government meeting on Saturday, according to a report by thepaper.cn.
Local governments also outlined plans for development in 2017, and many focus on the reform of State-owned Enterprises (SOEs).
According to the local government work report released Sunday, Northeast China's Jilin Province plans to select about 10 SOEs for pilot projects of mixed ownership reform in 2017, the local government said in a report, said domestic news portal news.cnstock.com.
Other provinces like Northwest China's Qinghai Province and Shanghai are also beefing up efforts to deepen SOE reform in 2017.
Shanghai will promote core business assets of SOEs to get listed, said media reports.
SOE reform has always been a vital task for the provinces, said Wang Danqing, a partner at Beijing-based consultancy ACG.
Wang told the Global Times on Sunday that "many resources can be introduced into the market via SOE reform to release dividends, which will become a driving force for the next round of China's economic growth."
China did much to cut industrial overcapacity last year, and such efforts will continue in 2017 to further support supply-side reform, according to experts.
"Overcapacity reduction is an onerous task as excess capacity remains in almost every manufacturing sector in China," Niu said.
In 2016, North China's Hebei Province slashed about 16 million tons of steel capacity and 17.6 million tons of iron, according to the local government's work report released on January 8.
Hebei will cut another 31.86 million tons of steel and iron capacity in 2017.
Wang also noted that different regions across the country will have various focuses on economic development in 2017.
For instance, eastern China is beefing up efforts to upgrade industries via enhancing the industrial structure and closing down outdated capacity, Wang said, noting that provinces in Central China will take over some of these industries from eastern provinces and try to optimize them.
"Those provinces in Central China will also eliminate some outdated capacity," he added.
Western China is committed to receiving industries that are being shifted from the eastern provinces, according to Wang.
