Reducing industrial overcapacity crucial but tough

An important mission of the supply-side reform is to reduce overcapacity, which is essential for the healthy development of the Chinese economy in the long run. The increase in labor cost and the other factors of production have not only weakened some conventional industries' advantages, but also worsened the overcapacity problem.

Yet reducing overcapacity does not mean eliminating conventional industries completely. So the reform should be carried out according to the specific conditions of specific places.

It is a remarkable that China took just 60 years to build a relatively complete industrial system while some developed countries took more than 200 years to do so. But since China's industrialization is not yet finished, the government still has to recognize the leading role of manufacturing in boosting economic growth.