Zhou Xiaochuan, governor of the central bank, took part in the 2016 annual meeting of the 50 forum of Chinese economy yesterday. He said that structural reform or structural adjustment is also a price reform and price adjustment. The important content of the supply side reform is to eliminate price distortions.

Zhou Xiaochuan said that under the assumption of market efficiency, the structural problems arising from the supply and demand of goods reflect the price problem, so the structural problem is price. Therefore, structural reform is price reform and price adjustment.

In the product market, it should be said that in most cases, the market is effective, supply and demand determine prices, and price changes determine supply and demand.

Structural adjustment also requires price signals to provide incentives, and structural adjustment without incentives is also very difficult.

For the view that there is a need to rely on Administrative Measures for price adjustment in the market void, Zhou Xiaochuan said that because China is moving from a traditional central planned economy to a market economy, from a point of view of thinking, we tend to see more links between market failure and market failure. We believe that under the link of market failure, the government should play a greater role or play a better role.

This involves the discussion and identification of which links are more effective and which links will be invalid.

Zhou Xiaochuan believes that the reason why the market is ineffective in a small number of cases is because the traditional economy has external effects, such as environmental pollution and carbon emissions, leading to market decisions.

It is misleading; but from the international practice (such as the collection of garbage disposal fees by product manufacturers), even if the market is invalid, especially in the case of external effects, there are still many ways to make the price mechanism play a better role. Similarly, other structural policies can not be better than price policies.

Also stressed that the current emphasis on the supply side structure

It is because of the global financial crisis that many countries have been overly dependent on monetary policy and over reliance on Keynes doctrine. Therefore, the government will turn to think more about the supply side policy.

In addition, structural policy is of great importance to foreign economic relations in the current global economy.

"We all think that some important product prices can not be regulated by the market.

But from the practical results, we find that the government led pricing has not been better. For example, the price of refined oil has evolved after several rounds of pricing. China's final product pricing is only a buffer period in the international market price (which is about 20 days' delay), filtering out the components of high price volatility, and then pricing in accordance with the international market price.

In short, it is hard to say that even with some important products, the market determines prices.

"Zhou Xiaochuan said.