International | May 22 2006
By Chris Shaw (Tokyo)
China’s growth continues to impress the world and attract more and more companies to its markets, but few actually understand the intricacies of Chinese policy and how it relates to its goals of achieving not only economic growth but a more equitable society.
Wu Jinglian, a senior research fellow at the Development Research Centre of the State Council of the People’s Republic of China has produced a number of suggestions for what still needs to be done for the Chinese economy to achieve the government’s goals, with the results also likely to boost its standing with the rest of the world.
Jinglian points out much has been achieved in moving towards the establishment of a market economy, but the changes have come at the cost of the old system and so further adjustments are required to deal with the problems these changes have created. These include a growing disparity between the wealth of the rural and urban populations, unemployment in the cities, the ongoing restructuring of state owned enterprises and a weak financial system.
To deal with such problems he suggests a continuation of the move towards a free-market economic system, but one where there is fair and equal competition. Jinglian argues there can be no more subsidising or preferential treatment granted to state-run enterprises, rather they must compete fairly and openly with private corporations.
To further this development he suggests the state-owned enterprises need to become more market-oriented while at the same time private business should be encouraged, as the competition would produce benefits for everyone by improving efficiencies and creating new opportunities and markets.
Changes must be made externally also, as he notes while China was accepted into the World Trade Organisation a few years ago it does not yet abide by the rules of global markets and international cooperation, the pirating of software being a good example of this. He suggests further enforcement of the rules to ensure the protection of legally acquired property is essential, as this would establish a stronger framework of social justice within the society and help reduce the potential for social uprising.
Jinglian suggests the pace of government reform has not kept up with the speed of the changes in the economic system, so it requires a more focused effort on the part of government to achieve the outcomes required to make the country both more equitable and more sustainable economically, for the benefit of the entire population.
