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Opinion / Op-Ed Contributors

Keep the reforms rolling

By Wang Xiaoguang (China Daily) Updated: 2014-02-13 07:36

Microeconomic reforms aim at completely removing market barriers to fully achieve the marketization of resources distribution. Macroeconomic reforms include improving macroeconomic control and reforming the fiscal and financial systems. The core of improving macroeconomic control is further propelling the transformation of government functions and reform of the financial system.

The core of macroeconomic system reform is fiscal and taxation reform, as these are the main obstacles to adjusting the relations between the government and the market in China, which means these will be the most sensitive and difficult reforms to carry out.

A modern financial system will require both short-term and long-term reforms. The government should push through urgently needed reforms that will be able to produce immediate effects. In those areas where great difficulties and resistance can be expected, there should be a progressive series of reforms, so the first reforms can create favorable conditions for the next and so on. It is expected that reforms in government administration, finance, investment, the household registration system and resource prices will be the first to be launched in the coming years.

Reform of the household registration system is one of the most urgently needed reforms. This will have both short-term and long-term effects, as it is necessary to release greater domestic demand as well as for social fairness and stability. Other urgent reforms relate to the process of marketization.

Reforms to further promote marketization, especially those that improve relations between the government, market and society are the most urgently needed that are both operable and already have consensuses.

There are good foundations for government administration reform and reform of the investment system. Since the new leadership took office, it has endeavored to reduce administrative examinations and approvals, and promote interest rate marketization and reform of the financing system, as well as commercial registration system. These have energized domestic capital and strengthened investors' confidence in the reform drive.

This year and next year the government should further promote reforms in these fields to achieve a cluster effect. It is also high time that it promoted resource price reform considering the urgency of air pollution management and ecological protection, especially when there is a strong reform consensus and less pressure from inflation.

The author is a researcher with decision consultation department under Chinese Academy of Governance.

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