Expert: Gov’t must clarify role in market economy
- By Wu Jin
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E-mail China.org.cn, November 18, 2013
The government should improve its governing capacity by reducing negative functions amid its continuous reforms in the buildup towards a better market economy, said Wang Yuanhong, top economist with the Economy Forecast Section of China's State Information Center.
Wang conveyed his views in a recent interview with CNTV.cn after the Third Plenary Meeting of the 18th Central Committee of the Communist Party of China (CPC), which closed on Nov. 12.
Wang expounded on the communiqué issued after the meeting and made several proposals for an unbound market economy.
"To improve the country’s governing capacity, we need first to set up a system." Wang said.
"Take the economy for example. We need to build fiscal, financial and social security [institutions] to guarantee a complete system."
Wang tackled the government's current general economic measures. According to him, the government has discarded a number of criteria for investments. Nowadays, private capital can enter into any area as long as there are no regulations and laws that clearly rule them out.
However, he continued, we have not yet freed up interest rates, factor prices, FOREX rates or the capital market. The blueprint did not flesh out more details and that's precisely the reason people are expecting more specific measures to be carried out over the following seven years.
Wang stressed that concrete measures are important for the development of private capital, which accounts for about 60 percent of overall investment.
He said that the country has to break down its invisible barriers, dubbed "glass doors" or "ceilings," which guarantee private investors clear prospects yet block their access.
State-owned conglomerates should loosen their control on social resources and a system should be set up for fair competition. Only this way can private investors be confident to enter the market, Wang explained.
"The equality between the private investors and the state-owned [enterprises] is something we must create," Wang said.
In addition to his support for a more opened-up market -- including a market-oriented system for pricing petroleum, electricity and tap water -- Wang said the government should also reform its taxation and charging systems.
"The people have to spend too much on the taxation of enterprises, so we need to do a lot in reducing the levies. Besides, much of the public charging is not very reasonable and therefore we still have room for improvement," he said.
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