Keep Reforming: China's Strategic Economic Transformation

The book discusses China's economic transformation and the challenges facing the country, including financial institutions' reluctance to lend, local governments' unwillingness to act, and the contraction of credit and higher financing costs for private enterprises. The author argues that China's policy should focus on internal demand and create a favorable business environment. The book also suggests that external shocks could be regarded as opportunities to accelerate reform and improve property rights protection, state-owned capital management, corporate governance, income distribution, and social security.

Format: Paperback / softback
Length: 266 pages
Publication date: 23 October 2021
Publisher: Springer Verlag, Singapore

This book delves into the profound transformation of China's economy, highlighting the successful control of macro-leverage ratios, the decrease in central market interest rates, and the resulting abundance of liquidity. However, despite these positive developments, financial institutions remain reluctant to lend, local governments hesitate to take action, and the effectiveness of liquidity released by the central bank in reaching the real economy is limited. This contraction of credit and increased financing costs for private enterprises has further exacerbated the downturn in the internal economic cycle, exacerbated by external shocks stemming from frictions in Sino-US trade. The resulting polarization of expectations regarding China's real economic prospects and policy trends is evident in the questions and discussions surrounding policy trends relevant to the private economy. Indeed, the current confusion of expectations surpasses that of 2008, during the onset of the international financial crisis.

From a dialectical perspective, the more pessimistic expectations regarding economic trends facilitate consensus on reform, leading to remarkable actual effects of reform that are grounded in a comprehensive understanding of China's economic development's phased characteristics.

In this book, the author, drawing from their experience working at the central bank of China, advocates for a policy shift towards prioritizing internal demand. The author suggests that China should continue its market-oriented approach, accelerate reform and opening up, and create a favorable business environment. This book presents the following opinions:

First, it is crucial to achieve a common understanding of medium and high economic growth, fostering a shared vision for the country's future.

Second, China must persevere in its market orientation, further liberalizing its economy and opening up to the world. This will involve promoting competition, innovation, and investment, while also addressing structural issues and improving the regulatory framework.

Third, the creation of a favorable business environment is paramount. This includes reducing administrative burdens, streamlining regulatory processes, and promoting fair competition. By doing so, China can attract domestic and foreign investment, fostering economic growth and creating job opportunities.

Fourth, China should focus on developing its domestic consumer market. By increasing the purchasing power of its citizens, China can stimulate domestic demand and drive economic growth. This can be achieved through measures such as expanding social welfare programs, improving education, and promoting consumer-friendly policies.

Fifth, China should prioritize infrastructure investment. By investing in infrastructure such as transportation, energy, and telecommunications, China can improve its productivity, efficiency, and connectivity, which in turn will support economic growth and create new opportunities.

Sixth, China should promote international cooperation and trade. By engaging with other countries and regions, China can expand its market share, access new technologies and resources, and foster economic growth. This can be achieved through bilateral and multilateral trade agreements, investment treaties, and cultural exchange programs.

Finally, China should maintain its stability and social harmony. Economic growth and development should be balanced with social welfare, environmental protection, and social stability. This will require effective governance, policy implementation, and public engagement, ensuring that the benefits of economic progress are shared by all members of society.

In conclusion, China's economy has undergone a remarkable transformation, and the country faces a critical period of opportunity and challenge. By focusing on internal demand, promoting market-oriented reforms, and creating a favorable business environment, China can achieve sustainable and inclusive economic growth. This will require a comprehensive understanding of China's economic development's phased characteristics and a commitment to long-term planning and policy implementation.

Weight: 427g
Dimension: 235 x 155 (mm)
ISBN-13: 9789811580086
Edition number: 1st ed. 2020