Deepen reform to boost China's growth
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The experience of the past 30 years has proved that the two engines of reform and opening-up have played an vital and effective role in driving China's economic and social development. Chinese policymakers have repeatedly said that the reform and opening up policy will continue.
But in China's current situation, domestic reform needs to be further deepened. The government should remove political and economic barriers to offer equal opportunities for people in all walks of life, and different forms of capital to take part in "survival of the fittest" competition.
It is to be hoped that Chinese policymakers will not place too much emphasis on different forms of capital, but will further deepen reform in the economic field, because for a long period of time, the government has been giving preferential treatment to public capital and foreign investment, while private capital has faced many obstacles and difficulties, and is effectively barred from some of industries, which has hindered China's economic development.
On May 7, China's State Council issued guidelines to further encourage private investment in a wider range of key industries, such as public utilities, scientific and technological programs for national defense, and financial services.
Private investors are to be welcomed to participate in the reform of state firms, the guidelines said. The government also restated its determination to create a fair and transparent environment for private investment.
These new guidelines remind me of similar regulations that China unveiled in 2005 to promote private investment, but which was not well implemented because of a lack of detail.
The new support plan opens a new range of industries to the private sector, including state-run industries, which is a great step forward in boosting private enterprise as the new engine of economic growth. More detailed measures need to be implemented to translate the proposals into tangible action to stimulate non-government investment.
(This post was first published in Chinese on March 17, 2010 and translated by Ma Yujia.)
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