China’s leadership is promising wide-range reforms in the country that will give markets a “decisive” economic role. A communiqué issued by China’s ruling elite at the end of a four-day meeting reinforced the reformist rhetoric of President Xi Jinping signaling an eventual end to state-mandated prices in the world’s second-largest economy. The Voice of Russia talked to Mr Francesco Sisci from “il Sole 24 ore”, an Italian national daily business newspaper.
A four-day session of top Communist officials in China had been touted for months as a make-or-break moment for reform, expected to produce a plan for how to revamp the Chinese economy so it depends more on domestic demand and less on exports abroad and heavy government spending back home. The communiqué called for fewer investment restrictions, greater rights for farmers and a more transparent system for local and national government taxing and spending—all areas where economists say China badly needs reform. But instead of specific plans the communiqué ambiguously emphasized the need to "encourage, support and guide" the private sector, while at the same time reaffirming "the leading role of the state-owned economy." China is under pressure to replace a growth model heavy reliant on investment and exports, since, after three decades of exponential growth, the country's economy is now slowing down. The first policy blueprint from President Xi Jinping a year into his reign said : ’Market forces would play a major role in the economy’. But also said: ‘The Communist Party’s hands need to stay strong’. These contradictions hint on a difficult role to head for economic reforms in China. Let’s try and get more insight on this as we are joined live on the phone from Beijing by Mr Francesco Sisci,who is a commentator for “il Sole 24 ore”, an Italian national daily business newspaper. First of all, let me ask you this: the communiqué is rather ambiguous in its statements, so do you think we should really expect major changes in the functioning of the Chinese economy in the near future? I think, yes. I think the communiqué is actually very carefully crafted not to oppose all the vested interests which are still very strong in the country but if you go into the language actually, you’ll see indications pointing at the need to reform state owned enterprises while the private sector has to be supported, sustained. So these are to me close indication that reforms will happen. If the changes do take place, do you think will we see an increase in the growth rate of the Chinese economy? Well, I don’t think so. I mean, the growth rate is still quite high. I mean, this year we expect 7,5%. In a way because of the size of Chinese economy overall I don’t think there is a time when we have to expect 10 %-12% growth rate per year as a decade ago or some years ago. But 7,5%, 7%, 8% is still a very sizable growth rate. The one-child policy in China has been contributing to the shrinkage of the country's workforce. Do you think the government might adopt changes to the policy in order to boost economic growth? There has been adaptation to the policy, I mean the past few years. And what we have seen is losing up of general policy. First of all first child now can have two children and restrictions in the countryside are much looser. And we are expecting in the next few years maybe not an overall abolition of the one-child policy, but certainly less restrictions. What do you think will happen to state-owned enterprises in China if they will be privatized? I don’t think that state-owned enterprises will be privatized or will be totally privatized. But I think the State may retain a golden share so to speak in some of those companies but their control will be diluted, private money will be welcomed into state-owned companies. And this also will help private companies. And especially what will be important is that state-owned enterprises will somehow lose their preferential policies with the state. Source: Article
