Latest News:  
Beijing   Light rain/Sunny    11 / 4 ℃  City Forecast

English>>China Business

Transforming economic struture risky but vital task for nation’s future (2)

By Stephen S. Roach (Global Times)

13:20, November 16, 2012

As the world's largest surplus saver, with total savings likely to amount to 50 percent of the GDP in 2012, China has the wherewithal to provide a significant injection of public funds into its retirement and healthcare systems.

China deserves a new round of SOE reforms. The first wave of SOE reforms in the late 1990s sparked improved efficiency in the Chinese economy. However, there has been discernible backtracking on this front, especially in the aftermath of the crisis of 2008-09, when State-directed banks funneled a massive fiscal stimulus into investments by SOEs.

Premier Wen Jiabao has warned of the risks of this reversal, especially those posed by an increasingly concentrated banking system.

New enterprise reforms are the only antidote. They must address dividend policy, which currently skews returns toward capital rather than labor. They must push for the public listing of remaining shares in State-owned enterprises. They must also stress market-based innovation strategies that would level the playing field between State-supported and private sectors.

All in all, after two decades of powerful reforms, momentum has slowed in the past 10 years. The legacy of former leader Deng Xiaoping faded in the rush to hyper-growth. Yet without reforms and opening-up, the Chinese miracle simply wouldn't have occurred. A similar push is vital if China is to move to the next stage in its remarkable development journey.

While the Chinese economy has demonstrated impressive resilience in the past several years, I do not think the global crisis has enhanced China's role in the world.

【1】 【2】 【3】

We recommend:

A Decade of Fastest Development

Eastern Boom Lightens Western Gloom

Chinese firms 'potential Trojan horses'? slows

AVIC unveils new aircraft engines

Oct. data released, inflation slows

13th Int'l Automobile Industry Exhibition

China Int'l Industry Fair opens in Shanghai

Caofeidian coal wharf put into use

Galaxy Soho building in Beijing


Leave your comment0 comments

  1. Name


Selections for you

  1. Breitling Jet Team at Airshow China 2012

  2. WZ-10 attack helicopter at Airshow China

  3. 35 couples say 'I do' in mass wedding

  4. 'Gangnam style' life of young rich

  5. Luxurious antique style vessel with 5D cinema

  6. Samsung unveils 10nm-class memory card

  7. Distributors to theaters: raise our shares!

  8. Who looks better?

Most Popular


  1. China's gradual recovery is underway
  2. What should Mo wear for Nobel ceremony?
  3. China should change growth model
  4. Bell Helicopter identifies China as strongest market
  5. RQFII quota expansion to bolster stock market
  6. IPR pirates face tougher prison terms
  7. Why 'Diaosi' gets so popular in China
  8. Reliance on investment should be reduced
  9. Live and let learn
  10. Coddled kids in need of tougher sports

What’s happening in China

Hunan college girl designs cheongsam inspired by women's secret language

  1. Police warn seniors about telecom scams
  2. Wedding gifts on school uniforms?
  3. Tiger' parenting more like folk prescriptions
  4. Dead mosquitoes lead to road accident
  5. Rhinestone motorist fails to impress police