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Reform to head economic agenda

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The Chinese Government will put enterprise reform on top of this year's economic policy agenda, leading to more mergers and acquisitions, a Beijing-based economist says.

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Chen Xingdong , chief economist of Socgen-Crosby, said this year was a political year to China because of the 15th Congress of the Communist Party's Central Committee, to open in August.

There would be a party reshuffle and a change of government officials early next year.

He said Chinese leaders would adopt a cautious and conservative attitude to deal with the economic problems.

Mr Chen said state-owned enterprises (SOEs) was a key issue because many problems had emerged from their poor performances, including worsening unemployment.

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China's urban unemployment should be about 7 per cent if workers who became unemployed due to SOE action were also taken into account. His forecast was higher than the government's 3 to 3.5 per cent.

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