China’s model of building global-scale SOEs to drive export-oriented growth has proven remarkably successful over the past two decades. But many would argue that if the country is to avoid a ‘middle income trap’, investment must shift to privately held – and often smaller – enterprises.Will China be successful in adjusting its growth model?What is the likely impact on regional and global growth?
Don’t worry about the Chinese people, we need to worry about the Chinese government. Chinese people are very market-oriented.
Global competition is very important... China is a nice export country in the world... China should try to strike a free trade agreement with Europe and that would bring competition to every industry.
(About relationship between the government and the society, the economy). Should government be more concerned about preserving allocated efficiency in the economy, creating the means for businesses to grow, creating a financial system which is stable, which allocates credit appropriately, which prices credit appropriately, which encourages new businesses to set up, which attracts foreign capital into China, and encourages competition in real sectors?
I believe that rising property prices and turning markets into a bubble, coupled with the free convertibility of the Yuan, may be pretty harmful for the economy. If we do that – this bubble will only grow and the reforms will be postponed even longer.
We need to continue reforming the tax system, to regulate the relationship between the centre and the local government, between the state and the businesses. We have to change the system that has been in existence over the past 10-20 years in terms of allocating tax revenue between the centre and the provinces.
What I see is two things: one is tax cutting, the other is squeezing the property bubble. I think that the most important tax is value added tax, because it is the bulk part of tax revenue… It is a consumption tax cut. If you want to support consumption, you must reduce the cost of consumption.
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