Economist Says About Need for China to Return to Basics

Wu Jinglian, one of China’s most outspoken and liberal economists, said Beijing should return to basics.

Economist Says About Need for China to Return to Basics

According to the mentioned expert, who is 94 years old, the implementation of the specified appeal in the practical plane provides for the establishment of an open, competitive, and orderly market in an Asian country. Wu Jinglian says that the path to success lies in reforming China’s economic system. According to the expert, the corresponding concept of action is a condition for the growth of the Asian country’s economy. Wu Jinglian also says that the effectiveness of reforming depends on the form of the market. Separately, the economist noted that in this case, the rule of law is of particular importance.

Wu Jinglian outlined his ideas on the most effective solutions and measures in the context of stimulating China’s economic development in an article for one of the academic journals of the Asian country. The expert also noted that it is extremely important for Beijing to coordinate all short- and long-term policies and make the main mission of building a unified, open, competitive, and orderly market system.

Wu Jinglian says that China should take advantage of the new wave of technological reforms. In this context, the economist’s article highlighted the importance of continuing innovative development in the relevant sector.

Wu Jinglian became famous among his colleagues because of his vision of what China’s path in the economic space should be. In the expert’s theorizing system, one of the main postulates is transformation.

Wu Jinglian’s comments are part of a larger discussion about China’s economic development. The relevant issues were updated against the background of the current reality faced by Beijing. In this case, the problems of economic growth are implied, which are the result of the crisis in the real estate sector and a drop in confidence on the part of consumers and investors. Currently, China needs new solutions to stimulate the economy, including measures involving large-scale actions characterized by fundamental impact. It is worth noting that the economic growth of the Asian country continues despite the difficulties. In 2023, this figure was 5.2%.

Currently, in an Asian country, new quality production forces are a kind of symbolic formulation, meaning something like the ideological foundation of economic and technological development. The author of the mentioned wording is the head of the People’s Republic of China Xi Jinping. In this case, Beijing’s commitment to technological innovation, reform policies, and the concept of openness is implied.

Wu Jinglian has been one of the main advisers to the Chinese government since the 1980s when the famous reform movement was forming. This conceptual orientedness was one of the most important components of the statecraft system of the late paramount head of the Asian country Deng Xiaoping. The mentioned movement’s ideology was a kind of theoretical platform that has allowed China to become the second-largest economy in the world in the space of material actions.

In recent years, the Asian country has seen a significant slowdown and, in a sense, a weakening of discussions on reform. In this case, the ideas of a large-scale or partial transformation of China’s economic system are implied. At the same time, the relevance of the specified discussions has increased significantly. The above-mentioned crisis in the real estate sector, the decline in confidence in China’s economic system, and problems in the sphere of demography are evidence that the existing development concept should be changed or completely replaced by another strategy to ensure sustainable growth in the context of new challenges and reality conditions.

Xi Jinping has repeatedly declared his intentions to deepen reform. He also consistently states the importance of an open market. The concerning statements, which, despite their inherently practical purpose, also have an ideological character, are contained in government documentation.

At the same time, the prevailing opinion in the foreign expert community is that, as part of its actions, Beijing is moving away from the concept of an open market in terms of its implementation in the material plane, despite numerous statements of commitment to relevant ideas.

Currently, China is witnessing an increase in the share of state ownership in the economic system. Also, in the Asian country, what can be described as an unstable regulatory framework is being observed. According to foreign experts, some new laws in China form various barriers and obstacles to the intensification of overseas business activities. In this context, the anti-espionage law is mentioned first of all. The foreign business claims that this regulatory initiative restricts investment opportunities in the Asian country.

Among the proposals by Chinese supporters of economic reforms, the most popular are raising the retirement age, the conceptual transformation of state-owned enterprises, and making changes to the household registration system. Also, in this context, the importance of removing barriers that limit the activities of private companies in the Asian market is very often mentioned.

Wu Jinglian has rarely taken part in public events lately but still continues to make statements about the importance of implementing the Beijing 2013 reform document, which stipulates that the market should be the central element of the Asian country’s economic system. Also in the mentioned document, 336 reform tasks were outlined.

A report published by the US-based Rhodium Group in February notes that Beijing’s results in the framework of actions to transition to a market economy model are mixed. In this context, attention is drawn to the fact that the government of the Asian country was able to make significant progress in gaining overseas investments, but did not solve the structural problems that caused the debt of the municipal authorities of the Asian country to grow.

Currently, China’s economic system is on a moderate growth trajectory. It is worth noting that Beijing and those who are interested in its success had high hopes for 2023. It was expected that the first year after the abolition of the zero-tolerance policy for coronavirus would be a period of active economic growth. The positive dynamic in 2023 was still recorded, but its pace was not as intense and large-scale as initially expected. The recovery of the Chinese economy after the coronavirus pandemic turned out to be uneven.

A large-scale credit and investment expansion was recorded in the Asian country for several years. Such measures to stimulate economic development can be effective and guarantee significant results, but their scale and duration should not be excessive. In China, the mentioned expansion provoked a drop in prices in the real estate area and an increase in the debts of municipal authorities. Against this background, there has been a drop in confidence in the private sector. Moreover, the problems of the Chinese economy are exacerbated by the tendency of an aging population.

Managing Director of the International Monetary Fund Kristalina Georgieva last month, during a speech at the China Development Forum in Beijing, called on the authorities of the Asian country for deep structural reforms. According to her, such measures are necessary to improve the conditions of entrepreneurship, innovation, and economic performance.

As we have reported earlier, Analysts Say About Need for New Chinese Strategy on Global Trade.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.