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China Voice: Government reforms will decide China's future

By Cheng Yunjie (Xinhua)

08:14, August 24, 2012

BEIJING, Aug. 23 (Xinhua) -- The choice of south China's Guangdong province as the site of pilot reforms designed to streamline the country's administrative examination and approval system indicates that the Chinese government has doubled its efforts to reform itself in the face of potential growth plateaus.

With its per capita gross domestic product hitting 7,000 U.S. dollars a year, Guangdong is one of a few developed Chinese regions facing the middle income trap.

Rising wages have destroyed the province's low labor cost advantage, making it less competitive with advance economies producing high-value products and undeveloped economies with low production costs. It is hoped that the reforms being put in place there will keep the province's development on track.

However, the province's performance under current conditions will act as a weathervane for the entire country's future development.

The State Council, or China's cabinet, said Wednesday that the reforms being put in place in Guangdong are urgently needed. The council has asked Guangdong to optimize its investment, fiscal, financial and social management mechanisms alongside its administrative reforms in order to clarify the limits of administrative power.

On the same day, the State Council decided to remove or modify 314 administrative examination and approval items, adding the total of administrative approval items rescinded or adjusted to 2,497, accounting for 69.3 percent of the total in 2001, when administrative approval reforms began.

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