Saturday 22 September 2012

GROWTH AND REFORM IN CHINA

Shanghai Daily

ADDICTION TO GDP MAKES REAL STRUCTURAL REFORM IMPOSSIBLE

Wan Lixin

Shanghai Daily, September 22, 2012

CHINA seems to be entering a period of moderate growth, and moderate inflation. That's deeply unsettling for a nation that has become accustomed to panegyrics.

Mind you, the epithet "moderate" could only be properly understood in the China context, against a decade of double-digit growth, in GDP (and some prices).

So the case for economic adjustment gives way to the urgency of stabilizing growth.

The holy grail of growth reminds us of the "efficiency" that once inspired the whole nation when the market-oriented reform was kicked off more than 30 years ago.

Efficiency was so enshrined at the time that millions of state-owned enterprise (SOE) employees were persuaded to give up their jobs to help cut redundancies.

Today a job with a big SOE is one of the most sought after. The senior management of some SOE banks can enjoy compensation and perks that would likely be the envy of investment bankers in the West. Unlike investment bankers, SOE bankers never worry about their profits.

So when we reminisce today about the good old days when efficiency was first idealized, we sense something missing in our enthusiasm: efficient for whom, and at whose costs?

(...) [artículo aquí]

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