Yu Bin: Helping companies reduce costs is undoubtedly a highlight

At the 7th Executive Director (Extended) Meeting of the 7th China Machine Tool & Tool Industry Association held on December 23, 2015, Minister Yu Bin of the Macroeconomic Research Department of the Development Research Center of the State Council, combined with the Fifth Plenary Session of the 18th CPC Central Committee and the 2015 just held In the spirit of the Central Economic Work Conference (hereinafter referred to as the Economic Work Conference), a wonderful report entitled "China's Economic Prospects" was made. Its content provides a useful reference for industry companies in a difficult transition to recognize the current economic situation and find a future development orientation.

Economic work conferences are highlighted, and cost reduction measures will bring substantial benefits to enterprises.
It is understood that the Economic Work Conference summarized the economic work of the "Twelfth Five-Year Plan", determined the ideas for economic work in 2016, the basic expectations of major economic indicators, and laid out the priorities for 2016.
Yu Bin summarized the contents of this meeting into four aspects: First, while moderately expanding aggregate demand, it went to capacity, destocking, de-leveraging, cost reduction, and short-boarding. Second, to ensure that macroeconomic policies are stable, industrial policies must be accurate, microeconomic policies must be alive, reform policies must be realistic, and social policies must be bottomed out. Third, actively and steadily resolve overcapacity, help enterprises reduce costs, resolve real estate inventories, expand effective supply, and prevent financial risks. Fourth, we must firmly grasp the first priority of development and not relax; rely on reform and innovation to accelerate the growth of new kinetic energy and the transformation and upgrading of traditional kinetic energy; focus on mobilizing entrepreneurs, innovative talents, and enthusiasm, initiative, and creativity of cadres at all levels.
It is not difficult to see that this Central Economic Work Conference not only objectively pointed out the main challenges facing China's current economy, but also established specific measures and related policy support to address these challenges. At the same time, it unified people's ideological understanding and emphasized reform and innovation. The importance of the people in this for the promotion of economic development. Among them, helping enterprises to reduce costs is undoubtedly the most concerned content of enterprises.
“This is also a highlight of this economic work conference.” Yu Bin said that in order to help enterprises reduce costs, the country will start from seven aspects, including: reducing logistics costs; reducing electricity prices; reducing corporate financial costs (financial institutions) To benefit the real economy); reduce social insurance premiums; study to reduce corporate VAT rates; reduce corporate tax burdens; reduce institutional transaction costs.
It can be foreseen that with the final implementation of these cost reduction measures in the country, it will surely alleviate the burden on enterprises to a certain extent, which is conducive to enterprises to go into battle and to fight the battle for transformation and upgrading.

The primary task of current economic work: strengthen supply-side reforms and resolve overcapacity
"In a way, 2016 may be the most difficult year for China's economic operation in recent years." At the meeting, Minister Yu Bin gave his own judgment on the overall economic situation in 2016. He pointed out: "From the current situation, this round of China's economic adjustment has not yet been completed, and the pressure of economic downturn is still further increasing. Under such circumstances, especially in the first half of 2016, the economic meeting will be the most difficult, and the economic operation will face Difficulties and stress will increase significantly."
The data shows that since 2010, China's economic growth has bid farewell to the past high growth and has been in a downward channel. It is particularly noteworthy that since 2012, there has been a clear divergence between the PPI (Production Price Index) and the CPI (Consumer Consumer Price Index). The PPI has been negative for 43 consecutive months, and the PPI decline for the fourth consecutive month in August, September, October and November has reached 5.9%.
“The sustained negative growth of PPI is mainly caused by the widespread and increasingly overcapacity in the industrial sector.” Yu Bin gave the reason.
He further stressed that when economic growth continues to decline and market demand continues to shrink, overcapacity will continue to increase, which is a prominent problem in China's current economic operation. If such overcapacity problems persist, excessive competition and vicious competition will be inevitable, and the level of profitability of enterprises will fall sharply. The growth of fiscal revenues of central and local governments will inevitably decline sharply, which will affect the quality and efficiency of economic operations. Therefore, the Economic Work Conference placed an emphasis on resolving excess capacity in a prominent and important position in order to actively promote the transformation of the old and new power of the economy and enhance the endogenous power and vitality of the economy.

In the process of new and old power conversion, industry enterprises must seize development opportunities
Yu Bin pointed out at the meeting that the negative growth of the demographic dividend, the urban housing per household exceeds one, the local government's high debt is unsustainable, and the global trade growth rate is lower than the GDP growth rate. This is the four major turning points of the Chinese economy in recent years. Change; the above changes and their superposition effects are the dominant factors in the continuous contraction of demand growth in recent years. The Chinese economy is in urgent need of new kinetic energy drives.
Recently, the central government has successively emphasized “supply-side reforms” at some important meetings. The Economic Work Conference has made it clear that in 2016, the supply-side structural reform will be launched. By increasing the clearance of excess capacity and cleaning up zombie enterprises, the three elements of capital, technology and manpower will be fully released, and new momentum will be injected into the long-term economic growth.
In the face of the current economic downturn, how to look at the relationship between the old and new power, experts pointed out that although China's old power high-speed expansion period has passed, but for a long time will remain an important source of economic growth. With good old power, you can create conditions and win time for training new power. Although the new power is growing rapidly, the volume is small and the power is not strong. In 2016, macroeconomic regulation and control will combine demand management with supply-side structural reforms. It is necessary to maintain a stable overall demand, avoid a sharp fall in the economy, and create a favorable macro environment for supply-side structural reforms. Therefore, companies do not have to worry too much about the downward trend of the economy in 2016.
In 2016, the structural reform of the supply side will soon be opened. For machine tool users, the machine tool enterprise as a supply side also needs to fully release the vitality of technology, capital and manpower. Standing at the new historical starting point, the vast number of machine tool industry enterprises must seize the opportunity to actively adapt to the development process of the new-generation industrial revolution with Internet technology, digitalization and intelligence as the main content in the process of transforming the old and new power of the economy. From the identification of its own industrial chain positioning, through technology and business model innovation, industrial mergers and acquisitions, and the establishment of modern enterprise talent management incentives and other means to promote the transformation of enterprises from manufacturing to manufacturing services, and ultimately achieve enterprise transformation and upgrading success.
(According to the recording, I have not considered it.)

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