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Leaders take 'bold' actions

China Daily

Experts say China is on path toward greater transparency, further deregulation

Leaders take 'bold' actions

A worker of the former State administration of radio, film and television removes the name board of the administration on March 22 after it was merged into the newly formed State General Administration of Press, Publication, Radio, Film and Television. Wang Zhen / For China Daily

China's new leadership has been taking "straightforward and bold" action to implement market-oriented reform by reducing administrative redundancy, empowering the private sector and opening up more to the world, global opinion leaders said.

Commenting on Premier Li Keqiang and his team's efforts in transforming the government's functions during previous months, the observers said China is on a path to achieve further deregulation, administrative efficiency and transparency, but more determined efforts are needed to tackle mounting challenges.

"Premier Li is moving reform in the right direction," Joe Borich, president of the Washington State China Relations Council, told China Daily on Monday.

In making government more efficient and reducing the number of obstacles for investment and production, more reform and opening-up is essential to continue the tremendous progress China has made over the past 30 years, Borich said.

Borich said the new round of reforms currently under way will certainly help sustain economic development and the creation of an all-around harmonious society. He said the private sector, which has been largely responsible for capital formation, innovation and job creation in China, has been put at a huge disadvantage vis-a-vis State-owned enterprises over the past five years or so.

"I suspect, though, that even though this round will help, it will not be enough," Borich said.

Rana Mitter, a professor of history and politics of modern China at Oxford University, said the Chinese government's moves show a welcome intention to create a more transparent and legally protected environment for doing business in China, and the establishment of a robust legal system is very important for the creation of a stable economy and society in China.

"However, one important factor that will greatly affect these policies is transparency. A very strong and positive move is needed to provide much greater transparency for the actions of the government and its agencies," Mitter said. "Without that, the reforms run the danger of sounding good but not having much effect."

Steve Tsang, a professor of contemporary Chinese studies at University of Nottingham, said he welcomed China's reform agenda because it is a good way to improve government administration and make it more efficient.

"I think China's economy is already very open," Tsang said.

Roderic Wye, associate fellow of the Asia Program at think tank Chatham House in London, said the Chinese government has been streamlining its government agencies to improve efficiency.

"I think the proposed reforms are coherent with the agenda China's new leadership has set out," Wye said. "But this round of reform is still in the early days. It takes time for the decisions to be translated into actions."

Borich said principal challenges ahead for Li's reform agenda are dealing effectively with corruption, leveling the playing field for the private sector and further reducing government intervention in investment and finance.

Jon Taylor, a professor of political science at the University of St Thomas in Houston, said Li's reform agenda is notable because it consolidates agencies, clarifies responsibilities and gives new agencies a clear functional focus.

"I take this to mean that Premier Li and the government will aggressively pursue continued - and significant - economic reforms," said Tayor, adding that transforming these functions can potentially increase non-government investment and employment, improve the competitiveness of State-owned enterprises and maintain a good level of economic growth.

Taylor said the observation has now been backed up with some compelling policy proposals, specifically through a recent State Council statement that China will further open capital accounts and allow individual investors to use overseas securities markets, reform the budget system and improve risk management of local government debt. Li also vowed to reform the household registration system to promote quality urbanization. These proposed reforms are both ambitious and necessary.

"To achieve so, there are serious challenges but I remain a China optimist, believing that it has substantial domestic sources of growth to tap," Taylor said.

Cheng Li, senior fellow and director of research at John L Thornton Center on China, Brookings Institution, said China's new leaders have a very clear roadmap on reform and domestic small- and medium-sized enterprises, and foreign investors would greatly benefit from the deregulations and market-based reform proposals. "But we need more detailed steps to fulfill the promises," Li said. "It is the right time for the government to scale up actions."

Yukon Huang, senior associate of Asia program at the Carnegie Endowment for International Peace, a Washington-based think tank, said the Chinese government has sent positive signals about reforms on several fronts, such as the State-owned sector, hukou system, exchange rate, interest rate and others.

But he said he believes determination and actions are vital.

"I think the question remains how far you can go on this," Huang said. "Reforming the government is always very complicated, because there are so many vested interests that would argue in favor of not changing various things."

Chen Jia in San Francisco, Zhang Yuwei in New York, Fu Jing in Brussels and Cecily Liu in London contributed to this story.

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