Latest News:  
Beijing   Overcast/Moderate rain    9 / 12 ℃  City Forecast

English>>China Business

Commentary: Remedies for economic challenges (3)

By Chorching Goh and Klaus Rohland  (China Daily)

08:06, October 25, 2012

In capital markets, recent reforms to introduce more flexibility exchange and interest rates are positive steps, but more importantly, competition should be introduced and regulation and supervision strengthened. To this end, financial institutions should be commercialized to meet varied demands of households, enterprises and governments. Financial infrastructure and its legal framework need to be upgraded, and a system for crisis management and insolvency schemes developed.

Sequencing the reforms is important. Front-loading fiscal reforms to eliminate off-budget borrowing by local governments; channelling SOE dividends to the budget; introducing new tax instruments, such as land and property taxes will create conducive conditions for more effective enterprise and factor market reforms. Introducing competition to State-dominated sectors will pave the way for SOEs' reform.

Lastly, price, regulatory and institutional changes in factor markets are essential. Actions such as improving the fiscal strength of local governments, introducing competition to "strategic" sectors and ensuring factor-input flow into activities that yield the highest returns shall contribute to the desired structural transition.

【1】 【2】 【3】


Related Reading

Leave your comment0 comments

  1. Name


Selections for you

  1. Helicopter formation of PLA army aviation force

  2. Four "gun masters" of PLA Beijing MAC

  3. James Bond and his girls on big screen

  4. Classic cars, sexy girls highlight auto show

  5. Top 10 self-made businesswomen in China

  6. China's economy has bottomed out

  7. China and France to protect freshwater lake

  8. Monarch butterfly

Most Popular


  1. Sino-US relations tainted by falsehood
  2. Foreign funding only short-term fix
  3. China's slowdown 'beneficial'
  4. China's development benefits all: U.S. city official
  5. Vested interests must not prevent gaokao reform
  6. Economic strains put Hollande on back foot
  7. Sino-Cambodian ties undimmed by Sihanouk’s death
  8. US should engage Asia as a partner
  9. US risks losing neutrality over Diaoyu
  10. New energy initiatives just for show

What’s happening in China

Civil service test applications surge

  1. Porn crackdown
  2. Avon warned by FDA for misleading advertisement
  3. Man on dating show gets call for medical advice
  4. Chinese daughters more filial than sons
  5. Police probe doctors in human egg case