China at key stage of reform, development

08:03, October 18, 2010      

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Deeper reforms, especially systematical ones, will be carried out and extended to more key areas in China during the next five years to provide further momentum for the country's future development after it comes out of the economic crisis, economists and observers have said.

The ongoing Fifth Plenary Session of the 17th Communist Party of China (CPC) Central Committee is discussing the 12th Five-Year Plan (2011-2015), or the nation's development plan for the next five years, and "reform" is set to be one key topic at the meeting.

At a meeting of the CPC Central Committee's Political Bureau two weeks ago, it was agreed that the coming years will be a crucial stage to deepen the reform and opening-up process while accelerating the transformation of the nation's economic development pattern.

The reform and opening up in China, which started more than 30 years ago, had helped the country to achieve rapid economic development in the past decade, and it is widely expected to enter a new stage and touch upon issues that are hard to penetrate, especially systematical ones, in the next five years.

Peng Sen, deputy director with the National Development and Reform Commission, the nation's top economic planner, said the systematic and mechanism restraints are the main crux that had frustrated the progress of China's economic development pattern transformation.

"Without major breakthrough in the system it would be difficult to achieve a fundamental change in the way of economic development," he told Xinhua.

Chi Fulin, head of the Hainan-based China Institute for Reform and Development, told Xinhua that the 12th Five-Year Plan is likely to focus on systematic reforms in economic, political and social fields.

While further improving the market economy system, China should speed up forming a public service system and a public service-oriented government, which would lay the foundation for boosting domestic demand and sustainable development, Chi said.

Wang Tao, an economist with UBS Securities, praised the Chinese government for efficient moves in the face of the global crisis, since a powerful government is able to position all of its economic resources.

However, she said, it is only the market that can provide continuous momentum for the country's development.

The government-dominated development model is very likely to have a "crowding-out effect", which might hamper activities in the private sector, she said.

Her view was echoed by Xu Guangjian, deputy director of the School of Public Policy and Management at Remin University, who called for the government to open more sectors to private investors in the next five years with detailed measures on loosening and encouragement of access to the market.

Income distribution, resource taxation and urbanization are also hot topics that had been repeatedly mentioned by economists, but they pointed out that it is more important for the government to turn itself into a public service-oriented institution and achieve social justice.

While trying to maintain sustainable growth, observers believed that growth in domestic production alone cannot solve all the problems that came out of the economic development process, and China should continue to strive for social justice in the next stage of reform.

"It is natural for people to ask for a better social environment after becoming satisfied at their material levels. But China's social undertakings have long lagged behind its economic development, which must be solved in the next five-year period," said Zhang Liqun, a researcher with the State Council's Development Research Center.

China has kicked off a health-care reform and a reform in the educational system, and the country is also planning to expand its social safety net by enlarging the number of social security cardholders to 800 million in the next five years from the current 190 million.

Also, better public services could lead to a better market environment so that the government could rid itself of redundant administrative procedures and focus on the promotion of social justice, said economists.

"The remaining battles in Chinese reforms are tough and challenging, and the key point is to establish a system that complies with the principle of scientific development, which would fuel the country's economic development at a fundamental level," said Zhang.



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