China’s reform and opening must continue, 40 years after its ‘second revolution’
G. Bin Zhao says the strengthening of Xi Jinping’s leadership will make further reform and opening possible – by removing the obstacles to change
Looking back over the last four decades, there is no doubt that reform and opening was the only way to create prosperity for the Chinese people, and this is certainly the consensus for most of the nation.
Taking a broad view of the announced and upcoming measures, it is certain that China’s reform and opening drive in 2018 will reach historic highs, unleashing economic vitality in many sectors and fields, which will become a major force for development in the next 10 to 20 years. These measures will have a dramatic impact on China’s economy and the whole of society.
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The best way to understand this impact is through examples.
There are many other industries and sectors facing similar problems, such as China’s civil aviation industry. The dominance of state-owned enterprises and restrictive government regulation restrain the expansion of private companies and market competition.
In China, based on an industry expert’s estimation, the number of aircraft, airports and general aviation pilots are only a very small percentage of the American totals, with government regulation and control cited as the main barriers to the sector’s development.
China’s general aviation sector is ready for take-off. Though the industry has gradually picked up in the last few years, further deregulation would unlock the market, creating massive economic value and opening the door for enormous business opportunities.
The market potential for deregulation and increased marketisation of the civil aviation industry is vast, and could potentially add a few million jobs and enlarge business revenues to a few trillion.
Lastly, continued reform and opening in China will never be easy. In many cases, there is resistance to the enactment of many urgently needed measures. This is why it has been so hard to implement the policy of “let the market play a decisive role in resource allocation”, introduced five years ago.
Without strong leadership to implement reforms from the top, many obstacles will not be overcome in China. Fortunately, the central leadership is more powerful now. The numerous measures for further reform and opening can be fully executed and the results should elevate the country’s economic development to much higher levels in the next few years. When we look back, the year 2018 will be another milestone in the history of modern China.
Confucius also said: “At 70 I could follow my heart’s desire without overstepping the boundaries of what is right.” Will China reach that level in 30 years? We look forward to embracing it.
G. Bin Zhao is a senior economist at PricewaterhouseCoopers China and he also leads the firm’s China Strategic Research. The opinions expressed here are the author’s own