China’s supply-side slogan means different things

BEIJING: To some it means upgrading China's ubiquitous hole-in-the-wall noodle shops, to others it is manufacturing high-tech toilet seats.

"Supply-side reform" is the buzz phrase at China's annual parliament in Beijing, picking up on an expression introduced by President Xi Jinping in speeches late last year. Analysts say it refers to the scaling back of the role of government in business to allow market forces greater room to flourish, such as through the restructuring of state-owned companies.

But its exact meaning has been left vague, giving room for the thousands of delegates at parliament to come up with their own interpretations, raising the risk of wasteful spending by provincial governments and underlining the difficult task Beijing has in clearly communicating its policies to local governments across the country.

"I think that's always been an issue in China. It's such a big country with so many layers of government - it's a challenge to push the message forward to a local level and make sure implementation is done properly," said Julian Evans-Pritchard, China economist at Capital Economics in Singapore.

So-called supply-side reform in the impoverished province of Gansu in northwestern China means officials are pushing hole-in-the-wall vendors of the province's famous Lanzhou beef noodles to invest more in interior design and "connect to the internet" so they can charge more, the official news agency Xinhua reported last week.

The noodle shops can become "like KFC and other western fast foods," Xinhua said.

Many officials at soporific delegate meetings said one version of supply-side reform should be getting Chinese manufacturers to reproduce the popular high-tech toilets that Chinese consumers are snapping up in Japan.