Although there has been considerable progress over the past two
decades, the economic mechanisms for reform are far from finished,
with further developments still needed at a broader level, said a
leading economist recently.
Gao Shangquan, president of the China Economic Restructuring
Institute, made the remarks in a report delivered at the
institute's annual meeting, which convened on Nov. 23, 2002.
Gao summarized four aspects of the economy that are hindering
further reform. Domestic reforms lag behind reforms related to the
opening-up policy, macro-economic reforms occur more slowly than
micro-economic reforms, government reforms take longer than
enterprise reforms, and political reforms are behind economic
reforms.
In
Gao's opinion, reform for the next period should focus on four key
aspects: property rights diversification; capital socialization;
equitable wage distribution and the administration of law.
Property rights diversification, as the cornerstone of economic
reform, is an effective way to explore diversified public
ownership. Capital socialization makes use of social capital,
governed by property right diversification principles, and reduces
the need for individuals to hold property. Currently, more and more
countries are choosing to adopt this method and make up for the
inefficiencies caused by individual capital accumulation.
The government's macro-control policies, its method of public
governance and democratic politics are crucial to the solving
problems of economic disorder, the polarization of wealth, and
enterprise ownership.
Social justice, addressing the balance between rights and
obligations, first emphasizes equality of economic rights, status
and competitive opportunities and the equality of social rights. In
addition, government and social organizations should ensure that
essential factors of production like labor, capital, technology and
management will be rewarded for their contributions.
Disparity in wages caused by competition brings not only the
benefits of efficiency and accumulated social capital, but also a
further polarization of wealth. Thus, it is necessary for
government to rectify these inequalities through a secondary form
of redistribution of wealth.
Advances in the legal system and governmental administration are
crucial in effectively implementing the law. First, the government
should take responsibility for creating a healthy environment and
maintaining equal rights in all markets, instead of emphasizing an
overall controlling function as it did before. Second, the
government should stipulate only what can't be done. Finally,
governance should abide by the administration of the law, instead
of taking executive rule. This is the best way for a market economy
to avoid official interference and corruption, thus keeping the
market in order.
(China.org.cn by Tang Fuchun, December 6, 2002)