Plan to expand public access to financial services
President Xi Jinping on Monday stressed that reform and innovation are the new engines for the country's economic growth, and called for a quicker implementation of both.
Xi said at a meeting in Beijing that China's economic development and reforms are "highly integrated," and that economic growth requires reform to move forward, the Xinhua News Agency reported Monday. He added that reforms and innovation would provide "sustained force" to push the nation's economy to grow.
At the meeting, the Leading Group for Overall Reform of the Central Committee of the Communist Party of China approved a number of guidelines designed to speed up implementation of the Free Trade Zone (FTZ) strategy, promote innovation for the processing trade, and build an inclusive financial system, according to Xinhua.
Experts said that Xi's comment and the newly approved guidelines show the determination of the government to quickly push through reforms to key areas of the country's economic structure.
"China's economy is in the middle of transformation, and reforms are essential to build a healthier economic system," said Xu Hongcai, director of the Economic Research Department at the China Center for International Economic Exchanges. He told the Global Times on Monday that the guidelines will speed up reforms in those specific areas.
The group called for swift implementation of the FTZ strategy, and letting the market take a "decisive function" in distribution of resources, and building a high-standard free trade network that can operate with both the domestic and the international market, Xinhua said.
China announced plans to establish three pilot FTZs in Guangdong, Tianjin and Fujian in March, and expand the Shanghai FTZ, which was set up in September 2013, Xinhua reported.
The pilot FTZs have yielded significant results since they were established, the Ministry of Commerce said last week, adding the FTZs have so far attracted 4,639 new foreign companies in the first nine months of this year, and contracts have been signed worth 346.11 billion yuan ($54.41 billion).
FTZs need time
However, FTZs have not helped with the country's foreign trade, Tian Yun, an expert at the China Society of Macroeconomics told the Global Times on Monday. It will take time before FTZs can play a major role in the country's foreign trade, he noted.
China's foreign trade dropped 8.1 percent year-on-year to 19.93 trillion yuan in the first 10 months of the year, with exports falling 2 percent and imports slumping 15.2 percent, according to official data released Sunday by China's customs administration.
But Xu said further expanding the FTZs and promoting innovation in the country's processing industry would help to address that. "The processing sector is essential in bringing up foreign trade, and innovation is what the sector needs now to improve its competitiveness," he said.
A guideline was approved by the group on Monday to promote innovation in the processing sector to meet a "new normal" in the economy, to shift focus from quantity of imports and exports to quality, the Xinhua report said.
Tian said that though the processing industry is currently facing challenges, and innovation and expansion plans may meet obstacles, it could benefit the country's western regions such as Sichuan and Chongqing.
A plan to build an inclusive financial system was also approved on Monday. The plan is aimed at expanding public access to financial services, especially for farmers and low-income individuals, as well as for small businesses, according to the Xinhua report.
Xu said such a move would help the public and small businesses get loans, and would therefore boost consumption, which the economy needs going forward. However, Tian said there are some issues at hand in this area such as local government fiscal issues, and the plan should focus on addressing them first.
