More state-owned firms must be sold first: Donald Evans
The US will not grant the mainland market-economy status until most state-owned enterprises are privatised, US Secretary of Commerce Donald Evans says.
'We have seen too few 'for sale' signs on the commanding heights of the Chinese economy,' Mr Evans told the American Chamber of Commerce in Beijing yesterday.
Mr Evans, visiting the mainland with US Secretary of Labour Elaine Chao, said the US would be tough in trade negotiations. 'China must significantly reduce government micromanagement of its economy and introduce a far higher level of transparency - among many other changes - before it can achieve a full transition to a market-driven economy,' he said.
Both Premier Wen Jiabao and President Hu Jintao have lobbied the US and the European Union for recognition of China as a market economy. Such status would make it substantially harder for World Trade Organisation members to impose tariffs on the country's exports.
Cao Yushu , deputy secretary-general and spokesman of the National Development and Reform Commission, criticised the US for not supporting Beijing's campaign for market-economy status.
'Everyone is entitled to their opinions, but I can say that 96 per cent of China's prices are set by the markets,' said Mr Cao.
'Where else in the world do you have a nation with such a high percentage and yet not be called market economy? This doesn't make sense.
'In the past, China was a centrally planned economy, but we've since reformed. The US should recognise this.'
Mr Evans said the US was not willing to overlook the level of state intervention in the mainland's economy. 'When a government controls the means of production, it radically distorts economic conditions, undermines efficient capital usage, and compromises long-term potential and stability.'
While 159,000 state firms are being sold, another key 197 companies destined to become global giants will stay in government hands.
Hu Biliang , a senior economist with the Chinese Academy of Social Sciences, was not surprised at Mr Evans' tough stance.
'We still have a lot to do in terms of reforms,' said Mr Hu. 'We still have to clean up state monopolies and to make competition fair. Our market economy isn't complete.'