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Download this week’s newsletter as a PDF here: CPW No. 45
Dear friends and colleagues,
Travel and a generally hectic week means minimal commentary once again. Sadly, this looks like it might be the case for the next few weeks.
Another reminder that I will be in Beijing off and on from March 23 to April 17. Any readers interested in meeting up or attending one of four CPW dinners (on economy, foreign policy, business environment and environmental protection) should get in touch.
What Li said
At his annual press conference on Sunday, Li once again reiterated the government’s overall approach to economic policy: Reduce government interference in the market to spur entrepreneurship and increase economic efficiency. I’ll let the Premier’s words speak for themselves:
“As the government sheds its own powers, vested interests will be upset. This is not nail-clipping, but taking knife to one’s own flesh. But however painful it may be, we are determined to keep going until our job is done…
“New steps will be taken this year and our focus is on the following three areas. First, all non-governmental review items will be canceled. We must ensure that government power will not be exercised when it is not stipulated by the law. There are currently over 1,200 review items at the local governments’ level, mandated by the central governmental departments. Our goal is to cut this number by over 200 this year. The government must not secretly hold on to powers that should be delegated, just like releasing the hand brake but still keeping the foot brake on. Second, all provincial-level governments will be required to release their list of powers and list of responsibilities this year. And this task will be assigned to governments in cities and city-level counties next year. We must keep our people well-informed of what powers their governments hold and put government power under public oversight to prevent the abuse of office. And third, we will explore new models for strengthening ongoing and ex-post regulation. We will expand the trials for integrated law-enforcement and we will establish effective models for exercising regulation over such acts as cheating and swindling of marketplace, violating intellectual property rights, making and selling fake and substandard goods, and cases involving food safety.”
Though the trend is towards less involvement in the economy, this is not to say that the government will not step in to support growth. Li made it clear that if employment starts to fall, measures will be taken to put a bottom under any downturn:
“And if the growth speed comes close to the lower limit of the proper range and affects employment and increase of people’s income, we will step up targeted macro economic regulation to boost the current market confidence while maintaining the continuity of our macro economic policies to anchor long-term market expectations. The good news is that in the past couple of years, we did not resort to massive stimulus measures for economic growth, and that has given us ample room to exercise macro economic regulation and we still have a host of policy instruments at our disposal.”
On the whole a pretty positive message for business. Liberalizing reforms will continue, but growth will be maintained…
China Politics Weekly aims to keep business leaders, investors, diplomats, scholars and other China hands up to date on important trends in China. It is produced by Trey McArver, a London-based consultant providing advice and intelligence to firms and investors engaged in China and the region. You can find out more about Trey and CPW in this interview.
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