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Economists warn that without reforms China will fail
Wu Jinglian, a top adviser to China’s Communist leaders, attacks the government. Without political and economic reforms, China could fail.
Beijing (AsiaNews/Agencies) – China must reform and soon or will lose what it has gained over the past 30 years, this according Wu Jinglian. Neither a dissident nor an international analysts, Wu is one of Communist China’s foremost and most respected economists. In an article published in the Economic Information Daily, Wu criticise Beijing for back-pedalling by allowing the state sector to rule the private sector.
The 81-year-old Wu Jinglian has been advising the mainland's top leaders since the start of Deng Xiaoping’s market-oriented economic reforms at the end of the 1970s. At present, he is a researcher at the Development Research Centre of the State Council and a member of the Chinese People's Political Consultative Conference's national committee, a top political advisory body of the government. In his article, he has called for breaking away from old ideologies and for the continued reform of state-owned enterprises.
His piece is so far the most direct attack against China’s leadership from within its ranks. The current crop of leaders is blamed for slowing the nation’s political and economic transition.
Even Premier Wen Jiabao said that more restrictions should be placed on the Communist Party's use of power, but his words have fallen on deaf years.
This, Wu noted, has allowed state-owned enterprises to expand rapidly their monopolistic power because of administrative protection and massive credit support from the state-owned banking system. All this has had distortive effects.
For instance, in an attempt to mitigate the impact of the global financial crisis, the state banking system in 2009 provided as much as one trillion yuan worth of credit to maintain the continued growth of the economy. However, most of that money, Wu said, was given to state-owned enterprises and local governments.
This will harm the long-term health of the economy. The executives of state-owned company, who are usually political appointees, cannot match their counterparts in the private sector in terms of efficiency and profitability.
The only way out is to implement fully reforms Beijing adopted in the past three decades or so, but which it have yet to be put into full practice because of resistance from special interest groups and fears of those who clung to old ideologies.