Expanding economic reforms imperative: Chinese economist

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Last updated at: (Beijing Time) Monday, October 20, 2003

Expanding economic reforms imperative: Chinese economist

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China still needs to traverse a fairly great distance for a complete socialist market economic system, said a Chinese expert recently, who listed severe challenges currently dragging the in-depth progress of the economic reforms.

A communique adopted at the Third Plenum of the 16th Central Committee of the Communist Party of China (CPC), which closed last Tuesday, named the establishment of a unified, open and orderly modern market system as one of the major tasks for further improving China's socialist market economic system.

Though domestic markets for common commodities, including ordinary means of production, were developed quite well in China, markets for capital, labor and human resources, all essential elements for production, were relatively underdeveloped, said Li Xingshan, a noted professor with the Party School of the CPC central committee.

According to official statistics, approximately 60 percent of the capital investment and some 40 percent of the labor employmentin China are not arranged in compliance with the market demands. Obstructions also fall on the development of the human resources market, with 56.4 percent of China's enterprise managerial personnel still appointed by government organizations and only 2.3 percent engaged from the market, reported Monday's People's Daily.

Li noted that the functional shift of the government and institutional reforms are the crux of matter to the improvement ofthe socialist market economic system.

"Despite the great reduction in the number of government workers and official procedures for approving a project, the original administrative style and methods haven't been changed in the main," Li said.

He acknowledged that the resources disposal and the operation of the national macro-economic control system sometimes still followed some conventional methods once used in the planned economic system.

The shift of governmental functions and institutional reforms, he added, not only called for an ultimate transformation in resources disposal means and the standardization of the macro-economic control system, but involved a series of deepening reforms concerning state-owned assets management, state-owned enterprises and financial and banking systems, as well as the foreign trade mechanism.

The communique passed at the Third Plenum of the 16th Central Committee of CPC also highlighted the tasks of narrowing the gap between urban and rural areas and promoting coordinated growth of different regions.

The differences between China's comparatively developed easternareas and underdeveloped western regions as well as between the urban and rural areas were not solely in economic growth. There still existed great disparities in economic system reforms and thematurity of market development, which merited more attention, Li said.

The communique also defined other major tasks for improving thesocialist market economic system as follows:

-- Improving the basic economic system of keeping public ownership as the mainstay of the economy and allowing diverse forms of ownership to develop side by side;

-- Improving employment, income distribution and social security systems; and

-- Establishing a mechanism to promote sustainable social, economic development.

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