China’s Supply-Side Structural Reforms
Article

China’s Supply-Side Structural Reforms

Progress and Outlook

The Economist Intelligence Unit
EIU, 2017
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As the world’s second largest economy, China continues its ascent despite troubling challenges. Its leaders’ efforts to continue the country’s dynamic growth, while transitioning the Asian giant toward a more consumer-centric economic model, depend on instituting comprehensive “supply-side structural reforms” (SSSR). In this thorough analysis, the Economist Intelligence Unit offers insight and perspective on SSSR and its components. getAbstract recommends this authoritative offering to executives, investors and policy experts interested in China’s economic development.

Summary

In December 2015, China embarked on “supply-side structural reforms” consisting of five components, which officials characterize as “three cuts, one reduction, [and] one strengthening”:

  1. “Cutting industrial overcapacity” – Experts noted in 2016 that capacity utilization remained below the benchmark of 75% in several industries, signaling excess supply. Officials slashed production that year in the coal and steel sectors, home to many “zombie companies.” However, rising prices will likely discourage deeper cuts, and reductions, so far focused within the private sector, have...

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