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China says Q1 economic growth shows promising prospects
30
Apr '16
China is patting itself on the back, claiming that the 6.7 per cent economic growth in Q1 of 2016 indicates promising prospects as the nation heads for economic upgrades while embracing innovation and creating new driving forces.

At the opening stage of the 13th Five-Year Plan, China's economy is shifting to medium-to-high growth and economic structures are further optimized, according to an article on the government's official website.

Market reform created fertile soil for innovation. In recent years, driven by a new generation of information technology, high-tech industries witnessed swift development.

The article cites Huawei, a Shenzhen-based high-tech company, as a vivid example of China's innovation-driven economic development, as it was listed 13th among the 50 global innovation companies by a US magazine, Fast Company.

Zhongguancun, another high-tech hub, is regarded as a forefront of innovation in China. Based in Beijing, the innovation hub is extending its focus from “Internet Plus business” to new sectors such as artificial intelligence, new materials, and new medicine.

“New ways of innovation is being forged,” the article quoted Sui Zhenyang, vice mayor of Beijing as saying.

China is also making efforts to boost mass entrepreneurship and innovation as 14 national-level innovation demonstration zones have been established so far. In Q1 this year, more than 3 million companies were registered, a 10.7 per cent year on year growth.

“China has become the largest place that gathers entrepreneurship investment, second to the US,” said Lin Nianxiu, Deputy Director of the National Development and Reform Commission.

To stimulate market, the government has been streamlining administrative powers. It has set up tests for a new negative list that enables more players to enter the market. Also, the registration process of new companies has been simplified as it takes only three days to register a new company, 23 days shorter than before, the article said.

Another effort is reducing overcapacity. As the top priority of supply-side reform, overcapacity reduction doesn't mean simply “subtraction”. In fact, reduction will be done along with industry upgrades.

For example, Xuzhou Coal Mining Group is planning to cut down production of 7.9 million tonnes of coal this year, but the century-old coal enterprise is stepping into new sectors of lithium battery, numerically controlled machine tools, and 3D printing.

In addition, the government also is making efforts to reduce costs as it has carried out reforms on replacement of business tax with value-added tax, clearing government funds, and lowering social security premiums. Such moves will reduce financial burdens of 500 billion yuan ($76.9 billion), 26 billion yuan ($4 billion), and 100 billion yuan ($15.4 billion), respectively.

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