Tue, Dec 18, 2018 - Page 9 News List

Chinese trade war fans call for faster reform

By Kevin Yao  /  Reuters, BEIJING

China’s trade war with the US is spurring some Chinese entrepreneurs, government advisers and think tanks to call for faster reforms in the world’s second-largest economy, and the freeing of a private sector stifled by state controls.

The calls for change have become louder as China celebrates a key anniversary, although there are no signs that the government is planning to shift any key policies.

Today marks the 40th anniversary of the opening-up of China’s economy by former leader Deng Xiaoping (鄧小平), and the start of a series of landmark capitalist experiments that lifted much of the country out of poverty and turned it into an economic powerhouse.

China has long said that it would further liberalize its vast market at its own pace.

However, a growing number of government advisers feel that now is the time to do so, saying that reforms would defuse trade tensions with the US and at the same time secure China’s long-term economic ascent.

The US has demanded that China shift away from its state-led model by cutting industrial subsidies, opening up its market to US goods, and cracking down on intellectual property theft and forced technology transfers.

“This could be an opportunity for China, as the pressure from the United States could be turned into a driving force for reforms,” an adviser to the government said. “The pressure on China is very big and we should have long-term preparations.”

US President Donald Trump and Chinese President Xi Jinping (習近平) at the beginning of the month agreed to a truce that delayed a planned Jan. 1 increase of US tariffs to 25 percent from 10 percent on US$200 billion of Chinese goods while they negotiate a trade deal.

To clinch a deal, China could make some concessions, including further opening up its market to US goods, scaling back subsidies and improving intellectual property protection, policy insiders said.

However, they added that China would not ditch industrial development plans that are vital to its competitiveness.

“The United States has requested China quicken reforms, which are also in line with our interests,” a second government adviser said. “We will push for market-oriented reforms, but we cannot be too hasty and we won’t completely copy the Western model.”

The Chinese State Council, the country’s Cabinet, did not respond to a faxed request for comment.

In June, China unveiled a long-anticipated easing of curbs on foreign investment in banking, agriculture, automotive and heavy industries as it moved to show that it would fulfil pledges to open its markets further.

Xi is today expected to give a major speech in Beijing to mark the anniversary of “reform and opening up,” diplomatic sources said.

There is widespread disappointment among some Chinese economists over the pace of reforms, after top leaders unveiled sweeping plans in 2013 to let the market play a decisive role in resource allocation.

Discontent over an increased presence by the Chinese Communist Party in all types of businesses has been growing over the past few months.

“There is still too much government intervention. I haven’t felt any relaxation for the time being and don’t think the government will relax,” said Sam Yu (俞丁山), general manager at Mentechs, an industrial equipment manufacturer in Changzhou in China’s Jiangsu Province.

“I think external factors are needed to promote internal reforms,” he added, referring to the trade dispute.

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