[Vnbiz] Inflation and threats of economic recession urged further Chinese reform

[Pham Thi Thanh An]

Dear CACC, 


 

I just come across this Economist article, and see how, in different ways,
China and Vietnam face so similar challenges. Just post it here to share
with you. 

 

Best, 

Thanh An


You have permission to think freely 


Mar 6th 2008 | BEIJING
>From The Economist print edition


China's prime minister lets a hundred flowers bloom. Well, ten 


 

Reuters 

IT MAY seem an odd time for China's risk-averse officials to be talking
about political change. Yet at the opening of the country's annual session
of parliament on March 5th the prime minister, Wen Jiabao, echoed recent
calls in the state-owned media to "liberate our thinking", even as he gave
warning of a difficult year ahead, with threats from inflation and from
America's subprime mortgage mess.

This year's session of the National People's Congress, as the legislature in
known, comes at a critical time. It marks the start of a new five-year term
of government (it will elect Mr Wen to serve until 2013). China is also
hosting the Olympic games in August and celebrating 30 years of "reform and
opening" in December. 

In 1978 the late Deng Xiaoping launched China's great reform programme with
a call to officials to emancipate their minds from Maoist dogma. In recent
months, some Communist Party officials and liberal scholars have been using
the 30th anniversary of that call to push for a new round of mental
emancipation. Economic reform has made enormous strides, they say. Now it is
time to turn to politics.

In his two-and-a-half-hour speech Mr Wen told nearly 3,000 delegates in the
Great Hall of the People that China must "break the shackles of outdated
ideas" and "boldly explore new ways". As is the way of things in China, the
words were vague; Mr Wen did not spell out what he meant by "thought
liberation" and he did not offer any strikingly bold initiatives. Yet the
intention was clear and these vague exhortations will fuel debate in the
months ahead. In the build-up to the Olympics, Chinese leaders are anxious
to preserve stability (not to mention one-party rule). But they appear ready
to think about making the party a bit more accountable. This, they hope,
might reduce social tensions caused by rapid economic change.

Mr Wen's immediate problem is inflation, which in January reached an 11-year
high of 7.1%. He set a target of 4.8% for the year, the same rate as in
2007, when fast-rising food prices began pushing up the index. "Upward
pressure" on prices, he said, would remain great and holding down inflation
would be "difficult". Stephen Green of Standard Chartered Bank said in a
note to clients that Mr Wen's target looked "dangerously unattainable".

Mr Wen said there were also increasing uncertainties in the world economy
that could affect China. In addition to America's subprime woes, he
mentioned the falling value of the dollar (increasing the cost of Chinese
goods in America) and the high prices of grain, oil and other commodities.
China must be "fully prepared" for global economic risks, he insisted. But
he also said a "primary task" this year would be to prevent the economy
(which grew by 11.4% last year) from overheating. This year's target is 8%,
but GDP targets are often set far lower than officials expect in order to
discourage reckless investment. 

Few are expecting much change on the political front in the months ahead.
But Mr Wen wants to see checks on government authority strengthened. "Civic
organisations" (to party officials the term NGO sounds too much like
organised opposition) would be given a role in "voicing the concerns of the
people", he said. 

Officials are keen to stress the importance of bureaucratic changes that are
expected to be endorsed by delegates in the coming days. These will involve
creating new "super-ministries" that will merge the functions of some
existing ones. The health ministry, for example, is likely to take over the
food and drug agency. A new transport ministry will absorb the communication
ministry (mainly responsible for roads) and the general administration of
civil aviation. 

But the difficulties surrounding even this limited reform (which leaves the
party's rule totally unchallenged) suggest that more sensitive political
changes will be slow to unfold. The railway ministry, for example, is
reported to be holding out against absorption. China has no energy ministry;
many officials have long said that it needs one. But powerful departments
with a stake in energy are resisting the idea.

Recent talk of "thought liberation", however, has gone far beyond the need
to shake up hidebound bureaucrats. Much discussion in the state media has
centred on a book published late last year by a group of scholars including
several from the heart of the citadel, the party's academy for senior
officials, China's equivalent to France's ENA. The work, whose abbreviated
title is "Storming the Fortifications", tactfully supports the party's
continued monopoly of power. But it outlines "urgent" steps for political
reform in unusual detail: turning the legislature and courts into "modern
power balance mechanisms" by 2016 and creating a "modern civil society" with
flourishing NGOs and religious groups by 2020. Freeing up the press, it
says, would also help.

Wang Yang, the recently appointed party chief of the southern province of
Guangdong, has been a prominent advocate of "thought liberation". Mr Wang,
who is also a member of the ruling Politburo, has called for a "new round of
mass discussion" of the idea. He used the term at least 22 times in a speech
to Guangdong party officials in January, according to the Chinese media. 

As an example of thought liberation, the press has enthused about a
government adviser in the provincial capital, Guangzhou. Last month he
called for the resignation of railway-ministry officials over their handling
of the transport chaos that ensued after severe weather at Chinese new year.
Such an open attack on senior officials by a prominent figure is rare in
China. Even the party's main mouthpiece, the People's Daily, has endorsed
his outspokenness. China's leaders may soon regret their encouragement.

 

 

 

 

Thanh An

email: thanhan2505 at gmail.com

 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://mail.saigon.com/pipermail/vnbiz/attachments/20080307/707a7b41/attachment-0001.html 
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: image/gif
Size: 1089 bytes
Desc: not available
Url : http://mail.saigon.com/pipermail/vnbiz/attachments/20080307/707a7b41/attachment-0001.gif 
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: image/jpeg
Size: 64091 bytes
Desc: not available
Url : http://mail.saigon.com/pipermail/vnbiz/attachments/20080307/707a7b41/attachment-0001.jpe