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Contributions from
the Column
Media
Make law not war
Human security:
useful survey
Anchor country China:
business perspectives
Energy policy:
a worthy introduction
01/2006 |
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Anchor country China:
business perspectives
Jan Joost Teunissen (ed.):
China’s Role in Asia and the World
Economy. Fostering Stability and Growth.
The Hague, FONDAD 2003, 308 pages,
¤ 24.50, ISBN 90-74208-22-3
Considering the size of China’s economy, there is good reason to examine this country’s economic outlook and its influence on the stability and growth of the world economy. This publication – proceeding from a Netherlands Forum on Debt and Development (FONDAD) conference – discusses the challenges which China is confronting in regard to domestic, continental and global affairs.
Current debate defines China as an “anchor country”, reflecting its importance on the world stage. Contributions by about 20 – mainly Asian – authors, scholars and experts in international finance and development, discuss the initial successes resulting from economic reforms, China’s role in Asia and the global economy, the Asian view of the global financial system and future challenges China faces. The book is very well structured, despite its complexity.
Economics Professors Gang Fan and Xiaojing Zhang ask how an agenda for reform should be designed to maintain growth for another 20 years. They suggest abolishing state monopolies, deregulating state-owned enterprises, diversifying the banking sector and giving it operational independence from the People’s Bank of China as well as promoting private property rights. In their opinion, there is a pressing need for sustainable pensions schemes, along with health and unemployment insurance. The state should loosen its control over the economy and take on the function of macroeconomic management.
For Professor Keun Lee of Seoul National University, China’s problems cannot be solved in isolation; they must be seen as a whole. He considers a major difficulty the friction between rapid growth and the introduction of market structures on the one hand, and the Communist Party’s aspirations to dominance and the need to ensure social stability on the other. High levels of unemployment, an excess of non-performing loans, as well as fast-growing disparities between the urban and rural areas and consequent migration flows, complicate reform efforts.
The book offers the reader a wide range of stimulating, sometimes provocative, opinions. The researchers generally agree that further deregulation of China’s financial sector is necessary. However, they by no means agree on how this should be done. The experts are unanimous in calling for a strong banking system, sound institutions, a flexible currency regime with emergency reserves of capital and a sustainable macroeconomic policy. A seven-point plan, based on the ideas of Gang Fan and Xiaojing Zhang, identifies some steps along the path to these goals.
Nicole Heppner, Regine Reim
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