Chinas Supply Side Reform Framework | Generated by AI
Question: Please explain in English: 持续推进“三去一降一补”，即去产能、去库存、去杠杆、降成本、补短板，优化市场供求结构。
Answer:
This Chinese policy phrase refers to a key set of measures in China’s supply-side structural reform, first prominently introduced around 2015–2016 and still being continuously advanced in later years.
“三去一降一补” (sān qù yī jiàng yī bǔ) literally means “three reductions/removals, one lowering, one補短板 (supplement/fill gaps)”. It consists of five specific tasks:
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去产能 (qù chǎn néng) — Cut overcapacity / remove excess production capacity
Eliminate excessive and outdated production capacity in industries (especially heavy industries like steel, coal, cement, and electrolytic aluminum) where supply far exceeds demand. This prevents vicious price competition, reduces waste of resources, and improves efficiency. -
去库存 (qù kù cún) — Reduce excess inventory / destock
Mainly focused on clearing large stockpiles, particularly unsold housing inventory in the real estate market, to stabilize the property sector, free up capital, and balance supply and demand. -
去杠杆 (qù gàng gǎn) — Deleverage / reduce leverage
Lower the high debt levels (especially corporate and local government debt) to decrease financial risk, prevent debt crises, and make the economy more sustainable. -
降成本 (jiàng chéng běn) — Lower costs
Reduce various burdens on enterprises, including taxes and fees, financing costs (interest rates), social insurance contributions, electricity prices, logistics costs, and institutional/transaction costs through government reforms (e.g., tax cuts, simplified administration, and better regulation). -
补短板 (bǔ duǎn bǎn) — Strengthen weak links / address shortcomings
Invest in and improve areas that are underdeveloped or insufficient, such as high-tech industries, innovation, infrastructure, public services (healthcare, education, elderly care), environmental protection, rural development, and other weak points in the economy and society.
The overall goal of continuously advancing these five tasks is to optimize the market supply and demand structure. By removing inefficient and excessive supply on one hand, and improving/adding high-quality and needed supply on the other, the policy aims to:
- Make the supply side more efficient and responsive to actual market demand
- Improve resource allocation
- Raise the overall quality of economic growth
- Reduce structural imbalances
- Promote higher-quality, more sustainable development
This framework has been a core part of China’s economic policy since the mid-2010s and remains relevant for addressing structural problems even in later periods.
References:
- https://baike.baidu.com/item/%E4%B8%89%E5%8E%BB%E4%B8%80%E9%99%8D%E4%B8%80%E8%A1%A5/19409375
- https://zh.wikipedia.org/zh-hans/%E4%BE%9B%E7%BB%99%E4%BE%A7%E7%BB%93%E6%9E%84%E6%80%A7%E6%94%B9%E9%9D%A9
- https://www.qstheory.cn/qshyjx/2023-10/11/c_1129910011.htm