Institutional reforms can help unlock savings

Editor's note: China's economy has transformed from lengthy periods of shortages to one of surpluses, said Wu Xiaoqiu, dean of the National Academy of Financial Research at Renmin University of China. Wu was speaking to Seashell Finance, a financial news outlet of Beijing News, about ways to stimulate consumption in times of "surpluses". Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

Back in the 1980s, the country's focus was on how to address shortages in supply. By turning the planned economy into a market economy, the country established incentive mechanisms and unleashed productive forces. But the toolbox designed to address supply shortages in the past is no longer suitable for the current circumstances, as overcapacity is widely seen in many sectors.

China has remained the largest manufacturer in the world for about 15 years, which speaks volumes about its strengths on the supply side. But in times of a "surplus economy", the logic which guides governance must undergo a fundamental transformation.