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China’s rural-urban divide, tax system weigh down economic potential, former official says
- Xu Lin, once an official with China’s top economic planner, has named several ‘imbalances’ threatening country’s overall economic health
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The third plenum of the Central Committee of China’s Communist Party, scheduled for next month, is expected to set the tone for the country’s economic policy for the next several years. In advance of that meeting, the Post is reviewing the work of notable scholars and observers about their own expectations – as well as their thoughts on China’s economy at large. The first part of this series can be found here, and the second here.
China should narrow gaps in its treatment of urban and rural inhabitants, better protect private property and overhaul its tax system to ease a number of socioeconomic issues, said a former official with the country’s top economic planner.
These changes are essential to resolving “imbalances” linked to “incomplete” market reforms, said Xu Lin, once the general director of financial and budgetary affairs for the National Development and Reform Commission.
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Xu named the most pervasive of these imbalances as those between urban and rural China, those between regions, those among industries and the disparity between levels of consumption and investment.
“The reason for these imbalances is the same,” Xu said in an interview with the Post. “My personal view is that marketisation hasn’t been fully realised … Reforms need to take another step forward to let the market have a definitive effect on resource allocation.”
Xu made his case as the Communist Party prepares for the third plenum of its Central Committee, scheduled for July. The committee is expected to release a plan to shore up the economy as erratic figures for factory activity, property purchases and consumer spending threaten to dampen the country’s post-pandemic recovery.
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