Seize the new opportunities brought by supply-side reform to safe production

Thread Content

This post was last edited by yinkuilin6868 on 2016-2-23 at 13:43. Insights on the Spirit of the Central Economic Work Conference / Huang Yi, Special Researcher at the State Council’s Advisory Office. Based on a clear analysis of domestic and international situations, the Central Economic Work Conference adheres to the development concepts of innovation, coordination, sustainability, openness, and sharing, in order to adapt to and guide the new normal of economic development. It outlines overall plans for economic work in the coming period, putting forward many new ideas, perspectives, and measures. Its most distinct characteristic of the era is an emphasis on reform and innovation: analyzing issues from a reform perspective, studying them with a reform-minded approach, and solving problems through reformative measures. Its biggest highlight is the introduction of the overall approach and key tasks for supply-side structural reform, with 2016 designated as the year to make decisive progress in such reform. We must deeply understand the great significance of supply-side reform, and seize the significant historical opportunity that this reform brings to work related to safety production. (1) Making supply-side structural reform a key task in current economic work holds great theoretical and practical significance. First, supply-side reform is a major transformation of unprecedented scale in the economic sphere. China’s economy is continuing to decline; on the surface it appears to be a matter of speed, but the root cause lies in institutional and structural issues, which reveal the many drawbacks of the traditional approach to development. If we continue down the old path of \"high growth, high investment, high consumption, and low efficiency,\" and keep relying on aggressive stimulus measures, it will inevitably lead to even greater overcapacity, and the economy could fall into an even deeper crisis. Therefore, accelerating the transformation of driving forces to promote economic \"upgrading\" and overcoming the \"middle-income trap\" is a hurdle that must be surmounted, and the source of momentum for doing so lies in reform. Only through reform can the backward mode of development be completely transformed, enabling the economy to truly embark on a path of development focused on quality and efficiency. Second, supply-side reform is a major measure to adapt to and drive the new normal of economic development. Adapting to and leading the new normal is not just a slogan; real strategies and practical solutions are needed. For a long time, under the model of rapid growth, our approaches to stimulating the economy have focused primarily on demand-side management, emphasizing factor inputs and relying on the \"three engines\" of investment, consumption, and exports, which yielded relatively noticeable short-term effects. However, under the new normal, it is necessary to adopt a long-term perspective and, driven by the \"three engines\" of institutional innovation, structural optimization, and factor upgrading, improve the efficiency of resource allocation and increase effective supply, thereby creating new demand as well. Under a market economy, the supply and demand sides constrain each other, with different priorities at various stages of economic development. To adapt to and lead the new normal, it is necessary to focus on structural reforms on the supply side. Third, supply-side reform is a major innovation in the political economy with Chinese characteristics. ****At the 28th collective study session of the **Central Committee***, it was emphasized that \"we must base our efforts on China’s national conditions and its development practices, identify new characteristics and laws, extract and summarize the regularities derived from China’s economic development experiences, elevate practical experience into systematic economic theories, and continuously explore new horizons for Marxist political economy in contemporary China.\" Proposing supply-side reform is in itself a significant theoretical and practical innovation that breaks away from conventional ways of thinking. It is not merely supply-side management in the ordinary sense, nor does it focus solely on supply or the market; it also differs from the theoretical views of the supply school in Western economics. It represents a major innovation based on a scientific analysis of the characteristics of economic operations under the new normal, and it constitutes an organic integration of methodology and practice. Its purpose is to enable the better utilization of both market and government mechanisms in order to promote sustainable and healthy economic development. (II) Looking at the overall situation of work safety in our country, despite long-term efforts and a steady improvement in the situation, serious accidents still occur from time to time, leaving the situation remains severe. There are issues such as insufficient subjective effort, failure to fulfill primary responsibilities, and inadequate supervision, but the underlying contradictions that hinder safe production have not been fundamentally resolved; the main problem lies on the supply side. First, the backward mode of economic development increases the pressure on work safety. China’s long-term high economic growth has been driven primarily by the input and accumulation of various factors; we generate 10% of the world’s GDP, yet we consume half of the world’s coal, steel, and building materials. This type of extensive mode of development has given rise to unreasonable demands in society. It has not only led to persistent shortages in key industries such as those related to energy and raw materials, but also to excessive extraction, overproduction, and overloaded transportation, resulting in frequent accidents. Furthermore, it has caused a severe surplus in the production capacity for coal, steel, and building materials. Second, an unreasonable industrial structure increases the risk of accidents. Long-term low-level repetitive construction has led to an excessive proportion of high-risk enterprises and labor-intensive industries, as well as a weak safety foundation. Among small coal mines, small mines, and small chemical plants across the country, those that lack the capacity for safety assurance account for 60%, 90%, and 82% respectively. There are 75,000 dangerous sections, covering 65,000 kilometers, such as sharp bends and steep slopes without guardrails, as well as areas near water or cliffs. Every year, 250 million tons of hazardous materials are transported by road across the country, moving from south to north and from east to west. Of the 120,000 kilometers of oil and gas pipelines across the country, more than half have been in use for 20 years; leaks occur from time to time. There are nearly 7,000 serious safety hazards, including illegal occupation of pipelines, insufficient safety distances, and intersections with other structures. There are over 3 million fire hazards of various types across the country. Third, the structure of the industrial workforce has changed, with uneven quality levels. As a large number of surplus rural laborers move to cities and towns to join the industrial workforce, the structural quality of China’s traditional industrial workforce has changed significantly. However, at present, there is no training mechanism or labor supply system in place to transform migrant workers into qualified industrial workers. Among the 8 million miners nationwide, as well as the 45 million construction workers and those employed in high-risk industries such as those involved in the production of fireworks, over 80% are migrant workers. More than 70% of them have not received any formal safety training. The practice of giving illegal instructions, carrying out work in violation of regulations, and breaking labor discipline persists, which is a major cause of frequent accidents. Supply-side reform targets these underlying issues; by reducing overcapacity, it aims to eliminate excess production capacity and achieve a balance between supply and demand ； By eliminating bankruptcies and restructuring assets, get rid of \"zombie enterprises\"” ； Further promote the adjustment and optimization of the industrial structure through factor upgrading. All of these will create favorable conditions for safe production. It can be said that supply-side reform is a fundamental solution to address the root causes of safety production issues. (III) We must deeply understand and grasp the new opportunities that supply-side reform brings to work related to work safety, consciously adapt to and guide the new normal of economic development, promote innovation and reform in work safety efforts, and foster coordinated development between work safety and the economy and society. First, it is necessary to strengthen the safety standards for market access. From a policy perspective, supply-side reform aims to handle the relationship with the market properly and give better play to the decisive role of the market in resource allocation. Therefore, **it is necessary to minimize various administrative approvals and lower the barriers to market entry, in order to create a favorable external environment for business development. However, reducing administrative approvals does not mean letting things go unchecked, and lowering thresholds does not mean lowering safety standards. While delegating and reducing administrative approval procedures, it is necessary to carefully consider how to strengthen the safety standards for market entry, in order to prevent companies with serious safety hazards from entering the market ； Study how to strengthen pre-event, in-event, and post-event supervision of safety production, so as to nip various types of accidents in the bud and prevent problems before they occur ； Study ways to increase the weight given to safety production assessments, implement a \"one-vote veto\" system for major accidents and significant risks, and establish effective supervision and restraint mechanisms. Second, encourage enterprises to strengthen their basic security management. Supply-side reform adheres to the market competition principle of \"survival of the fittest,\" which creates the necessary environment for the restructuring of market microentities. It is necessary to seize the favorable opportunities presented by capacity reduction and asset restructuring, and resolutely eliminate those production and operation units that do not meet safety standards. At the same time, it is necessary to urge various enterprises to fulfill their primary responsibilities for safety production as stipulated by the Work Safety Law, to improve internal management systems centered on responsibility systems, to address various loopholes and shortcomings in safety measures, and to ensure adequate investment in safety, proper basic management, sufficient safety training, and effective emergency response. Advance the mechanization, automation, informatization, and standardization of enterprises, and establish a long-term mechanism for safe production characterized by self-restraint and continuous improvement. Third, strengthen the infrastructure for enhancing security capabilities. Supply-side reform will run through the entire process of economic and social development during the 13th Five-Year Plan period. We must take advantage of the situation to strengthen the infrastructure for safe production. Building on the implementation of the \"Nine Major Projects\" for work safety during the 12th Five-Year Plan period, it is necessary to continue allocating funds and resources to projects aimed at enhancing coal mine safety capabilities, improving road traffic safety, addressing potential hazards, preventing occupational risks, strengthening emergency response capabilities, promoting scientific research and development, establishing models of safety culture, and improving supervision and monitoring capabilities, thereby further raising the overall level of safety protection. It is necessary to accelerate the implementation of the \"Strengthening Safety through Science and Technology\" strategy. Mandatory safety technical measures should be introduced in areas such as preventing coal mine gas accidents, hazardous material transportation and storage, poisoning and suffocation in confined spaces, tunnel construction collapses, pipeline leaks and explosions, as well as fires in public places. A system for identifying and addressing potential hazards should also be established. By utilizing high-tech solutions and big data, etc., improve monitoring and surveillance systems, as well as forecasting, early warning, and rapid response mechanisms, in order to enhance the ability to prevent and manage risks. Fourth, accelerate the reform and innovation of safety supervision work. Taking supply-side reform as an opportunity, it is necessary to effectively shift the approach to safety supervision. In terms of conceptual framework, it is necessary to establish a comprehensive well-off society that is first and foremost a society with strong security safeguards; safety in development must be upheld, and the emphasis on putting people first and valuing life above all else must be reinforced ； In terms of work objectives, it is necessary to strive to ensure that the public can live and work in peace and contentment, that society remains stable and orderly, and that people enjoy safety and happiness. By 2020, this goal should be achieved simultaneously with the completion of building a moderately prosperous society in all respects, thereby bringing about a fundamental improvement in the security situation ； In terms of the scope of regulation, while continuing to strengthen safety oversight in key industrial sectors, it is necessary to gradually expand this oversight to areas related to public safety and occupational health, in order to meet the growing expectations of the people for safe development ； In terms of methods and approaches, it is necessary to strengthen the mindset based on the rule of law and risk prevention and control management, adhere to addressing both symptoms and root causes as well as adopting comprehensive management strategies, and pursue a new path of socialized, law-based, and meticulous management ； In terms of institutional mechanisms, it is necessary to strengthen the Party’s leadership over work related to work safety, and gradually establish a leadership framework characterized by \"shared responsibilities between the Party and government, dual responsibilities for each position, joint efforts in management, and accountability for failures to fulfill duties.\"