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Cary Huang

Those who dare will cure  nation's ills and make it truly modern, 'Mr Market' says
A man who helped lead the long campaign to develop the mainland's market economy believes political change is now the ultimate solution to the mainland's economic problems - despite a 30-year boom built on continuous market-oriented reform.
Wu Jinglian   is popularly known as 'Mr Market', and likened to the late Nobel Prize winning economist Milton Friedman. He dared to think the unthinkable as he helped to design the framework of the mainland's market economic system.
That was especially true since 1980, when he took over the helm of the Development and Research Centre  and served as one of the principal advisers to reformist leaders, including former party chief Zhao Ziyang   and former premier Zhu Rongji .
Now he says that if the mainland is to become fully modernised, it must introduce three principles: democracy, constitutionalism and the rule of law.
Mr Wu said the mainland should not resist the world trend towards democracy, constitutionalism and the rule of law, nor  miss the historic chance to introduce political reform.
'[We should] begin with the introduction of the rule of law and pick up the pace of political reform,'  he said.
The ruling Communist Party knows that festering corruption within might be its undoing. President and party General Secretary Hu Jintao   and his predecessor, Jiang Zemin ,  have repeatedly warned that the war against this blight concerns the party's survival.
But no patient can treat himself, and corruption has infected crucial party organs including the police and the judiciary.
Although the debate on corruption runs far ahead of that on policy, party leaders nonetheless show signs of recognising that the cure will only come with risky reforms to the political structures.
Mr Wu said major economic and social ills, such as rural-urban inequalities and corruption of party officials, stemmed from 'flaws in the economic and political system'.  Although it would be a tough task to introduce a modern system based on the three principles, there would be no cure without them, he said.
'In my view, the key to whether the reform will go ahead lies in the government itself,' he said.
Removing institutional barriers was essential to the economy's continued reform, he said.
Recalling his 30-year battle to promote market reform,  Mr Wu said three events  were milestones in this process.
The first was the party leadership's decision in 1984 to include the phrase 'building a commodity economy' in the party statement issued after the plenum meeting - a decision that really marked the beginning of market reform.
The second was the decision a decade later to overhaul the country's fiscal, financial and foreign exchange systems.
The third milestone was the party's decision in 1997 to 'take public ownership as mainstream and allow all ownership to commonly develop', he said. This set a base for the building of a free market economy.
Mr Wu pointed to five areas in which  the leadership needed to advance in the drive towards a true market economy and modernisation: reform of the property rights system, further reform of state-owned enterprises, the establishment of a market regulatory mechanism, faster expansion of the social security net, and the introduction of the rule of law and political reform.
His views come from hard-won experience. The son of a pre-1949 newspaper magnate, Mr Wu, 78, graduated with an  economics degree from  Fudan  University. He was purged during the Cultural Revolution because of his background, an experience he says toughened him to withstand criticism.
In the 1980s, he carried out research at Oxford and Stanford universities, and has been an advocate of the privatisation of state-owned enterprises,  campaigning for  them to leave certain sectors, such as telecommunications, and  let in private players. That would end  state control in areas that some planners insist are strategically important to the nation.
'The reform to introduce a share-holding system for state-owned enterprises has not yet accomplished its goal,' he said, referring to the government's plan to turn most giant state firms into publicly listed or public holding companies.
While the word 'privatisation'  remains taboo,  Mr Wu has consistently urged the government to get its hands out of business. He said the main task of government reform was to cut or abolish intervention in the distribution of resources and the setting of prices.
'The government should be restructured into one that mainly focuses on providing public goods and services,' he said.
For 30 years the mainland has been  transforming its economy  to a market-based model. Most prices are now set by supply and demand, China is the world's third-largest trading nation and private property is constitutionally recognised.
But important remnants of central planning and control remain, he said, and that  was holding back the realisation of Beijing's proclaimed goal of  a true market economy.
Mr Wu said the reform of property rights  was far from complete because farmers were not entitled to full ownership  of their land, which is now collectively owned. Instead, the government grants farmers 30-year leases on land plots.
Without a genuine system of private ownership,  farmers had no right to sell their land and little incentive to invest in the capital needed to increase agricultural productivity, he said. Meanwhile, local party officials  had become rich by selling land-use rights to developers, and there had been a serious rise in social unrest.
To move up the ladder of economic freedom, Mr Wu said, the mainland  needed further reform of property rights, continued privatisation of state-owned companies and to 'accelerate the formation of a modern market system that is open, competitive and ordered'.
Market forces
Wu Jinglian
1930: Born in Chongqing
1954: Graduates from Fudan University with economics degree
1980: Becomes executive director of Development and Research Centre under State Council
1998: Becomes member of Standing Committee of Chinese People's Political Consultative Conference
1999: Author of Fifteen Critical Issues of the Reform of SOEs
2001: Author of Reform: Now at a Critical Point
2005: Receives honorary doctoral degree in social science from University of Hong Kong
Private cars owned by mainlanders
2003: 2.09m
2007: 15.22m
Credit cards issued
2003: 3m
2007: 99.76m
Credit card users*
2001: 1m
2007: 31.77m
*The mainland issued its first credit card in 1985



Political change must come next