China's economic reform has entered into its 25th year since it
began to "reform and open up to the world" in 1978. So far a
socialist market economic system has been established at a basic
level. Yet given China's complex situation, reform is far from
over.
A recent issue of Outlook Weekly analyzes in an article
the critical moment of reform now China is at and the next moves to
be taken by the central government.
The article says, the Communist Party of China (CPC) is going to
work out new concrete measures on how to further improve the
socialist market economy at the third meeting of the 16th
CPC Central Committee scheduled in October.
Speaking of problems in the current reform, the article suggests
that the socialist market economic system is not yet complete as
the core part of the traditional planned economic system remains
unchanged. Interests of older government bodies and state monopoly
sectors have not yet been broken up. Moreover, some newly
established key systems are just still sketches and unstable with
many problems remaining.
First, government restructuring function cannot meet the needs
of all new situations. There is still a long way to go to improve
the efficiency of government organs and administration levels;
increase the transparency and consistence in the policy-making;
reduce administrative interference in concrete matters; and to
exercise correct public management in the economy and in
society.
Second, the mechanism of large state-owned enterprises is not
correct, and has heavy social burdens and poor innovation.
State-owned enterprises in the monopolized sectors lack the
pressure for "survival of the fittest", so that they lag far behind
the demands of society and customers in terms of operating
mechanisms, charging systems as well as service quality.
Third, investment and finance reform goes so slowly that many
redundant building projects and importation of redundant technical
facilities are caused by local protectionism and administrative
interference.
Fourth, legal systems protecting private assets are still
incomplete, related tax policies, financial policies and investment
service systems are still poor, non-state owned economy has not yet
been fully developed.
Fifth, institutional designs of financial systems and security
market systems have shortcomings that result in unscientific
distribution of finance resources, high percentage of bad debts,
poor supervision of finance industry and high financial risk.
Sixth, social credibility is very poor and market order
chaotic.
Finally, the distribution system of social income is not
reasonable while social security system is backward, endowment
insurance, employment insurance and medical insurance not yet
complete.
The article attributes these contradictions and problems in the
latest phase of reform to traditional ideas and behavioral norms
formed under the planned economic system.
The new tasks for the next step include:
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Launch a final war against the toughest and most stubborn parts
within the system left by the planned economy
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Adjust totally the monopoly system and power structure of the
state-owned monopoly enterprises
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Encourage bold innovations in political systems and superstructures
that can not march up with the market economy
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Downsize government bodies
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Conduct basic adjustment towards the irrational interest order left
by the old planned economic system and shaped by the transition
from old to new
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Change wrong governance brought about by effective supervision and
over government interference on economic activities.
(China.org.cn by Zheng Guihong, October 6, 2003)