Institutional Innovation And China's Supply-side Structural Reform

The Supply-side Structural Reform is a new idea of Chinese economic governance under the new normal,it is aimed at a deepening reform of the key areas of China's Supply-side Structural,which will promote structural adjustment,correct the twisted factor allocation,expand the effective supply,improve the supply structure of the changing needs of adaptability and flexibility,improve the total factor productivity,to better meet the needs of all people,and promote the economic and social sustained and healthy development.Institutional innovation is the process of institution reforming,improving,substituting,transforming and renewing,which mainly involves two aspects:how to arrange the new system and how to transfer the old system to the new institutional arrangement.Whether it is western economics or economics of Marx believe that the essence of economic reform is the system change and innovation,even in the view of new institutional economics,the importance of institutional innovation on economic development is far more than the technology,capital,natural resources,is a key factor to economic development.In the late 1970s to early 90s,in the process of economic governance,China and the West both reformed the supply side of the economic system,in varying degrees.In Chinese,the reform and opening-up that started in 1978 is a process of Supply-side Structural Reform,which increased the supply of system,essentially.In the west,at the end of 1980s and early 90s,facing a severe economic stagflation situation,Britain and the United States,Germany and others Western capitalist countries were carried out with different measures,such as the privatization of state-owned enterprises,tax cuts,adjust the economic structure,and so on.The Supply-side Structural Reform not only shows that institutional innovation is a key factor in determining the success of the reform,but also give China's current Supply-side Structural Reform an important inspiration,in the basic principle and main measures.There is a profound internal relationship between institutional innovation and China's Supply-side Structural Reform.The system factor is a key factor determining the efficiency of economic growth.Institutional innovation is an important measure to promote economic growth,to the transformation of economic development mode.And,it plays a leading role in economic development,which can promote the overall social production efficiency improvement.However,institutional barriers are the reasons for the serious lag of institutional supply,the lack of institutional innovation and the slow progress of independent innovation,which is the deep-seated reason for hindering the smooth progress of structural reforms on the supply side.The cause of these institutional barriers is the market level,but also the government level.And they respectively as follows:the micro market is lack of independence and autonomy,the market competition mechanism is bad,legal construction is lag,system key elements of old field is difficult to adapt to the market economy development needs;system innovation model transformation lag,government functions change the lack of motivation,interest game policy failure,and so on.Therefore,the key to promote China's Supply-side Structural Reform is institutional innovation.Promoting the Supply-side Structural Reform by Institutional Innovation,need both based on the current and focus on the future,on the basis of sharing the concept of reform and development,paying attention to the coordination of system and mechanism,adhering to the basic orientation of Marketization,emphasizing the rule of law,and so on.In the short term,the most urgent task of the Supply-side Structural Reform is to well in "the consumption of excess capacity","resolving the huge inventory","reducing excessive leverage","reducing costs" and"fill short board".This involves a wide range,the specific content is various,but the root cause is the problem of system.Therefore,only rely on the reform and innovation of the system can be fundamentally resolved.In the long run,in the factor of determining China's long-term economic growth,technology,land,labor,and capital supply side factors are all facing system obsolete,difficult to adapt to the needs of the development of the market economy.Which needs a institutional reform to change the bad situation of the supply side.For example,in the system aspect,we should deepen the reform of government decentralization;in the labor level,to adjust and improve the population policy,constructing the scientific population system,accelerate the implementation of the strategy of human capital;in technology aspect,to accelerate the implementation of innovation driven strategy,thoroughly remove institutional barriers to innovation driven development,innovation and development to create a favorable the social environment,and so on.The Supply-side Structural Reform is a systematic and long-term huge project,but institutional innovation is the critical part and throughout the whole process.Although it is still in its infancy,but as long as the accurately grasp of the key link of system innovation,and strengthening exploration,deepening practice and innovation,we must be able to achieve remarkable results.