One of China's top economists called on leaders yesterday to accelerate the nation's privatisation drive as a means of sustaining long-term growth. Wu Jinglian, an economist with the State Council's Development Research Centre and a delegate to the CPPCC, said the nation could not sustain long-term growth through fiscal stimulus and budget deficits alone. His call follows Finance Minister Xiang Huaicheng's announcement on Thursday that the nation will issue 140 billion yuan (HK$132.3 billion) worth of long-term treasury bonds this year to help stimulate growth and job creation. In total, the nation has issued more than 1.93 trillion yuan in domestic debt - 660 billion yuan of this in the past five years alone - and US$165 billion (HK$1.28 trillion) in foreign borrowings. 'You can't go on stimulating economic growth through fiscal stimuli,' said Mr Wu. 'You must also create self-sustaining economic factors. This is where the second engine of growth comes in, and this is China's private sector.' Mr Wu said he agreed with the new government's policy of enlarging the private sector, which currently accounts for an estimated 30 per cent of gross domestic product (GDP). 'China's exports really took off after 1999, and this is because the government allowed private firms to export that year,' Mr Wu said. 'Before that, private Chinese firms were not allowed to export.' So far, the government has accelerated growth and created jobs by building massive infrastructure projects like highways, roads and dams. But Mr Wu said the private sector would be a much better way to generate jobs. 'The only way to create new jobs is to let society create them,' he said. 'The government should only set the rules and establish a good investment environment.' He also cautioned the government from taking on too much debt. Although the government's debt ratio stands at about 30 per cent of gross domestic product, considered low among developing countries, Mr Wu said the real debt ratio could be much higher. Citing a World Bank report, Mr Wu said it could be as much as 70 per cent to 100 per cent of GDP. Taking into account the sum the government owes to retired workers in the form of social security benefits, together with the burden of non-performing loans at state banks, the nation's debt is likely to be at least 50 per cent of GDP. 'Our nation's debt level is definitely something we have to pay attention to,' Mr Wu said. 'If not, some day China may not be able to pay its debts. Of course, we're still far from that day.' Another problem Mr Wu said must be addressed was the fact that the mainland economy was not yet truly market-driven. 'China's economy isn't fair,' he said. 'There isn't equal opportunity, and this is particularly true when it comes to political power. It is people with access to power that have more opportunities.' However, he believed the mainland's prosperous coastal regions were at the early stages of forming a real market-driven economy. 'This is because places like the Pearl River Delta and Shanghai have a large diversity of enterprises of various origins, state, foreign and private, and it is this diverse mixture in these regions that is pushing China's growth,' Mr Wu said. In the inner provinces, state-owned or local government- owned enterprises still predominate, and it is inland where most of the nation's 900 million poor peasants live. Mr Wu said the only solution was for peasants to move to the cities - and the only way to create jobs for these people was to push for private sector growth.