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US Economist: Stimulating Export with Subsidy Likely to Disrupt Economic Balance
American economist Steven Lewis, who has been researching on the economic growth of the developing countries for about 50 years, recently commented on China's economy, especially the foreign trade economy, after China's WTO entry. The comment was made at the symposium, titled¡°China's Entry Into the WTO: Opportunity and Challenge¡±, held recently by the Information Office of the State Council.
Lewis maintained that how to keep a balanced economic development after China¡¯s WTO accession is the most important problem presently facing the country. He warned that China shouldn't grant long-term subsidy to a certain industry in disregard for the balanced development of other industries. In his opinion, it's effective to bring about a sharp rise in the export of a certain industry by the method of subsidy within a short period of time, but, in the long term, this practice will cause serious imbalance in a country¡¯s revenue and expenditure.
Lewis said that foreign trade is exerting ever-larger influence on China's economy, how to achieve the sustainable development of agriculture is a serious problem confronting China. He suggested that China launch an overall reform of State-owned enterprises and agriculture through structural reform to make them keep a balance with foreign trade.
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