China Economy

China economic reform still vital, business leaders say

PUBLISHED : Monday, 22 April, 2013, 12:00am
UPDATED : Monday, 22 April, 2013, 5:53am

China's new leaders should press ahead with reforms even though the strong economic growth of recent decades is tapering off.

That was the conclusion of the senior executives of multinational firms SCMP reporters spoke to during the Boao Forum in Hainan earlier this month.

They were asked their views on core issues confronting the world's second largest economy, such as how the economy will fare under the new leaders who took office last month.

Asked about their expectations of economic growth in the next five to 10 years, most were confident of a minimum seven per cent increase annually.

"It's not realistic to expect the double-digit growth again," said Xie Yi, president of Chia Tai (China) Investment, an investment unit of the Thailand-based Charoen Pokphand Group. "Actually it's not a good thing if the economy moves too fast."

Despite more than 30 years of openness and reform, there were wide calls for greater efforts in overhauling state-owned enterprises, the social welfare system and the financial sector.

"Market reform must be a long-term issue. We cannot go too fast," said Wang Haijun, chief risk officer of state-owned China Cinda Asset Management. "But I do think the government must tackle some burning problems in state-owned enterprises reform and in social welfare."

Mitsubishi Corp assistant manager Atsushi Ikeda felt the Xi Jinping regime was unlikely to make fundamental changes because the country was still ruled by the Communist Party. He said soaring wages had forced Mitsubishi's clients to relocate manufacturing to cheaper countries in the region.