Business / Economy

'Purpose, urgency' to reform

By Amy He (China Daily) Updated: 2014-10-23 07:30

'Purpose, urgency' to reform

Containers being unloaded at a wharf in Lianyungang port, Jiangsu province, on Oct 8. A new report estimates that China's GDP growth will be 6 percent by 2020. [Photo provided to China Daily]

New report says Third Plenum blueprint to help China become advanced nation

A year after China's Third Plenum reforms were announced, Beijing has shown that it is "moving ahead across all economic dimensions with purpose and urgency", says a new report released by the Asia Society on Wednesday.

The Asia Society Policy Institute, the group's new think tank, called the Third Plenum economic reforms "game changing - far more than a minor adjustment of business as usual or an attempt to stall for time".

The new report, entitled Avoiding the Blind Alley: China's Economic Overhaul and Its Global Implications, discusses the status of China's economic overhaul as the country moves forward under the leadership of President Xi Jinping.

"With the launch of the Asia Society Policy Institute, we really seek to look at issues where there isn't full understanding of the implications and do a thorough analysis to help the world better understand the major trends in Asia and in China," Josette Sheeran, president and CEO of Asia Society, told China Daily.

"We feel it is important to have taken a look at the large-scale economic reforms that were announced 11 months ago, to look at the full body of work and the implementation since then," she said.

"Our main conclusion is that these reforms are clear, they are very comprehensive, and they're very compatible with China becoming an advanced economy."

Dan Rosen, author of the report and cofounder of research firm Rhodium Group, predicts that China's GDP growth will be 6 percent by 2020, which he said falls on the optimistic side of the spectrum.

His figure is in the same range as projections released by the World Bank and the International Monetary Fund. The World Bank prodicted that Chinese GDP growth will hit 7 percent in the same time period and the IMF, 6.6 percent.

"The most important takeaway from the study is that China has the opportunity to deliver 6 percent GDP growth all the way through to 2020 if it gets reform right. The stakes are huge for doing that," he said.

With trade, for example, Rosen said that if China can see its reforms through, exports will increase from $2.4 trillion in 2013 to $3.5 trillion by 2020. Imports will jump to $3.7 trillion by 2020, from $2.1 trillion in 2013, which would make a "huge difference to the rest of the world".

"One of the reasons we did this report is that people are underestimating the reforms," Sheeran said, "and it's important to see the extraordinary opportunities that will open up under this soft landing scenario. Just the increase of imports into China alone really points to an opportunity."

If China were to hit a hard landing, the rest of the world would definitely feel the effects as well, she said.

"It also means potentially a less stable and confident China to be partnered with around the world, so it's very much in the US' interest to see China come through this and hit its potential," she added.

A year after the reforms were announced, there are China watchers who have said that economic reform has not happened at a pace that shows confidence from the Chinese government, which Rosen said should be considered from both sides.

"For many Chinese researchers, a lot of this is not transparent, and hard to sort out. There needs to be a little bit of appreciation from the Chinese side of why there's this sort of reaction around the world," said Rosen.

"Here in the US, people need to bear in mind all the challenges that come with undertaking reform in China, given all the social and developmental challenges the country faces."

'Purpose, urgency' to reform

'Purpose, urgency' to reform

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