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Opinion

Reform consensus must be acted on

By Xin Ming (China Daily)
Updated: 2014-03-12 07:29

Premier's work report set out the roadmap for addressing the problems that hinder economic and social development

Premier Li Keqiang's Government Work Report has outlined the roadmap for China's economic and social reforms in 2014, which are regarded as the beginning of the comprehensive deeper reforms that are the consensus as well as the expectation of Chinese society.

Li set China's GDP growth rate at about 7.5 percent, which means China has stopped focusing on GDP growth, and has instead turned to solving the prominent problems that hinder economic and social development, in order to achieve long-term, high-level and high-quality development.

Against the backdrop of the sluggish global economic recovery, China's unscientific development mode, unbalanced economic structure, unsustainable economic drivers and inefficient industrial pattern have caused growing pains, and it is time for China to change its economic development mode.

China has proposed changing its economic development mode before, but this has yielded little fruit, as, besides some objective difficulties, the high GDP growth rate has become a constraint. During the process of changing the economic development mode, especially in the early stages, a decline in the GDP growth rate is unavoidable. Because if the authorities set the goal of GDP growth too high, local governments can hardly slow down local GDP growth as it will mean tremendous loss of economic interests and poor political performance. Once the enterprises in outdated industries cease operations, the economic volume and economic growth rate will immediately decline. However, cultivating new industries is a progressive process that will take time. So the GDP growth rate will certainly slow down during the transitional period. Therefore a high GDP growth rate makes it impossible to achieve the transition of the country's economic development mode.

Thus reducing expectations of the GDP growth rate is an important strategic means to create space for changing the economic development mode. In this sense, the 7.5 percent GDP growth rate will safeguard as well as promote reforms that focus on accelerating the transition of economic development mode to improve the quality and efficiency of economic development.

The government's fundamental goal is to let all Chinese people live a happy life. Thus reform in 2014 will start with people's top concerns.

Employment is vital to people's livelihoods. The Government Work Report advanced two goals for employment, namely creating 10 million new jobs in 2014 and guaranteeing the registered urban unemployment rate does not exceed 4.6 percent.

Incomes are the root of people's livelihoods. To narrow the income gap, the authorities will try to increase the incomes of the poorer members of society through various channels, seek to enlarge the middle-income group and guarantee that urban and rural citizens' income increases are around the same pace as economic growth.

Social security is the foundation of people's livelihoods. Without solid social security there can be no high-level improvement of people's livelihoods. The Government Work Report advanced establishing a proper mechanism to guarantee people's basic life quality and encourage people to create their own career.

"Safety on the tip of tongue", which was mentioned in the Government Work Report, means the authorities will tighten supervision of food and drug safety by establishing a whole-process supervision mechanism and traceable system from producing and processing to circulation and consumption.

To implement reform in reality we should start from the understanding that all walks of life have reached a consensus. The government should make good use of its visible hand and relax over the market's invisible hand, so as to let the market play a decisive role in the distribution of resources and remove obstacles that restrict the market's vitality.

From the Government Work Report we can clearly see the authorities will promote gaining the maximum benefits and optimized effectiveness from the distribution of resources according to market rules, market price and market competition. More sectors will be opened to non-public enterprises. Moreover, the authorities will further propel administrative reform, simplify administrative procedures and delegate more powers to lower levels. It not only requires the government not abusing power, but also requires it doing its job well.

The new reform program still faces great challenges even if we have reached a consensus, because the current unfair and unjust interest pattern means there are those who will resist reform. But if we cannot translate the public consensus into determined action so as to resolutely implement reform, it will be difficult to make a breakthrough.

The article was first released on Study Times.

(China Daily 03/12/2014 page9)

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