image

China economy

Pro-market economist excluded from China’s reform and opening up honours list

  • ‘Spiritual leader’ of pro-market reforms ignored in 40th anniversary top 100 of contributors to China’s economic transformation
  • Critics charge his absence is political and signals an end to market-led era
PUBLISHED : Tuesday, 27 November, 2018, 4:32pm
UPDATED : Tuesday, 27 November, 2018, 8:12pm

One of China’s most prominent economists has been left off the government’s list of “outstanding contributors” to the country’s transformational economic reforms, reigniting concerns over the direction of the Chinese economy.

Wu Jinglian, the 88-year-old “spiritual leader” of the pro-market reformist camp, was not on the preliminary list published by People’s Daily on Monday to celebrate the 40th anniversary of China’s reform and opening up policy, which set the country on a path of unprecedented growth.

The list was dominated by Communist cadres, top scientists, Mao Thought researchers, red capitalists from Hong Kong, private entrepreneurs and former NBA basketball star Yao Ming.

The list, which is open for public feedback until the end of November, has been published at a time when both China’s development model and future direction are in question amid the trade war with the United States.

China’s top 100: local cadres beat tech titans to dominate Communist Party reform honours list

Li Yining and Justin Yifu Lin, both professors at Peking University, are the only two Chinese economists on the honours list.

Li, 88, was “one of the first scholars to introduce joint-stock [company] restructuring theory, participated in the reform of state ownership, and helped draft legislation for the securities law and the securities investment fund law”, according to the online statement which accompanied the list.

Lin, former vice-president of the World Bank, is included because of his “economic theory innovations”. The 66-year-old developed New Structural Economics, a framework which advocates an active government role in economic development, particularly in less developed countries.

“This is clearly political,” said Fraser Howie, who co-authored Red Capitalism: The Fragile Financial Foundations of China’s Extraordinary Rise . “It seems incredible that Wu Jinglian is not on the list.”

Wu was a key adviser to the Chinese government from the 1980s, the early years of the reform and opening up movement which helped transform China into the world’s second largest economy.

In recent years, he has repeatedly called for the thorough implementation of the government’s 2013 Reform Document, which for the first time mentioned letting the market play a “decisive” role in the economy and set out 336 detailed reform tasks to achieve that goal.

Wu sat next to Vice-Premier Liu He, President Xi Jinping’s top economic adviser, at a September economic conference and explicitly called for a re-examination of the reform progress.

Last week, at a Caixin conference, he repeated that message. “The design of the pillars of the new system has already been completed. The only problem is whether [the government] has the great political courage and wisdom to implement them,” he said.

Beijing must show courage to fulfil its market promises, says China’s economic reform guru

Howie warned that the era of reform could be over.

“Xi wants a strong state in charge, he just does not believe in market forces as a solution to problems, nor does he see any space in which the Communist Party can’t or should not intervene,” he said.

In recent months, the Chinese leadership has tried to assure China’s struggling private sector of the government’s support and continued commitment to economic reform and opening up.

Steve Tsang, director of the SOAS China Institute in London, said the leeway given to market forces depended on what the Communist Party wants and needs.

“This is his [Xi’s] approach – he wants the economy to do extremely well and knows that this requires allowing scope for the market to play a major role,” Tsang said.

“But ultimately he relies on the party under his leadership to determine the course, which is quite different from the Deng Xiaoping approach of crossing the river by feeling for stones.”

Inside China podcast: 40 years of economic ‘reform and opening up’