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Opinion

Wisdom behind China's comprehensive reform

(Xinhua)
Updated: 2014-03-06 22:15

BEIJING -- China has made reform its top priority for 2014 but the question as to how to accelerate comprehensive reform while maintaining steady economic growth will test the new government.

On the one hand, accelerating reform needs determination as it will offend vested interests; on the other, reform should be conducted at a pace that will avoid economic instability.

Wisdom behind China's comprehensive reform

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Wisdom behind China's comprehensive reform

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"Reform is the top priority for the government's work this year," said Premier Li Keqiang in his first government work report, delivered Wednesday at the opening meeting of the national legislature's annual session.

The report also set this year's economic growth target at 7.5 percent, the same as last year's target and slightly lower than the 7.7-percent actual growth in 2013.

"China sent its strongest signal yet that its days of chasing breakneck economic growth were over, promising to wage a 'war' on pollution and reduce the pace of investment to a decade-low as it pursues more sustainable expansion," a Reuters report said.

"China wants to change tack and rebalance its economy," it said.

Whether China can continue to quickly push forward its reform has grabbed global attention.

Since the government unveiled a 60-point reform blueprint after the third plenum of the 18th Central Committee of the Communist Party of China (CPC) about three months ago, nearly half the tasks listed on the plan have been initiated.

In Li's report, economic restructuring tops all reform measures and the highlighted ones include the administrative system, the fiscal and tax systems, the financial sector and equal development of state and non-state enterprises.

As a major attempt to transform government functions, the central government plans to add another 200 administrative approvals to the list of 416 being abolished or delegated to governments at lower levels, which it identified last year.

"We would welcome the simplification of procedures and also reduction of government intervention," PricewaterhouseCoopers partner Jens-Peter Otto said.

Otto took the capital verification report as an example. All companies, including foreign investment entities in China, used to need such a report verifying their paid-in capital, issued by a certified public accounting firm, in such circumstances as when a company is initially established,or when there is a change in capital or shareholders.

"I read in the third plenum (of the 18th CPC Central Committee), this kind of capital verification report will be abolished in the future," Otto said. "Although we would earn money with this report because we usually prepare this capital verification report, we welcome this change as that has been an additional burden for companies."

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