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China / Government

Xi urges local authorities to advance supply-side reform

(Xinhua) Updated: 2016-05-16 23:33

BEIJING -- Chinese President Xi Jinping has called for "unswerving efforts" to advance supply-side structural reform, commanding local authorities and various departments to come up with policies to support the campaign.

There may be difficulties and risks in the process, but local authorities should not shy away from the task, Xi said at a meeting of the Central Leading Group for Financial and Economic Affairs on Monday.

After hearing reports on reform efforts from Jiangsu, Chongqing, Hebei and Shenzhen, Xi acknowledged that some of the plans are bearing fruit and contributing to growth.

"But some policies need to be studied further, and some regions have not yet taken effective actions," he noted.

China's local governments are busy making and releasing detailed measures to implement supply-side structural reform as authorities count on the move to counter ongoing economic headwinds and address outstanding issues such as excess capacity, housing overhang, and "zombie" state-owned enterprises (SOEs) with poor profitability.

Xi reiterated that the focus should be put on measures to cut excessive industrial capacity, destock, de-leverage, lower corporate costs and improve weak links.

The ultimate aim of the reform is to improve supply quality and reduce "ineffective" supply, which is essentially about deepening reforms in SOEs, transforming government functions and carrying out overhauls of areas such as pricing, taxation, finance and social security, he said.

The roles of the market and government should be put into better play to balance the reforms, he added.

At Monday's meeting, Xi also stressed efforts to expand the middle-income group, improve the income distribution mechanism and strengthen intellectual property protection.

Premier Li Keqiang, who is also deputy head of the Central Leading Group for Financial and Economic Affairs, also attended the meeting.

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