Archive for ‘reform’

19/12/2018

China marks 40th anniversary of reform and opening-up

CHINA-BEIJING-40TH ANNIVERSARY OF REFORM AND OPENING-UP-CELEBRATION (CN)

Chinese President Xi Jinping, also general secretary of the Communist Party of China (CPC) Central Committee and chairman of the Central Military Commission, addresses a grand gathering to celebrate the 40th anniversary of China’s reform and opening-up at the Great Hall of the People in Beijing, capital of China, on Dec. 18, 2018. (Xinhua/Yao Dawei)

BEIJING, Dec. 18 (Xinhua) — China held a grand gathering Tuesday to celebrate the 40th anniversary of the country’s reform and opening-up, a great revolution that has changed the destiny of the Chinese nation and also influenced the world.

President Xi Jinping and other Chinese leaders attended the event which began at around 10 a.m. at the Great Hall of the People in Beijing.

Premier Li Keqiang presided over the meeting.

The celebration started with all participants rising to sing the national anthem.

Wang Huning, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, read a decision to award the personnel who have made outstanding contributions to the country’s reform and opening-up.

The people are “the creators of the great wonder of reform and opening-up” and “the source of power” to drive the campaign started 40 years ago, Wang said.

According to the decision made by the CPC Central Committee and the State Council, 100 Chinese were awarded the medals of reform pioneers and 10 foreigners were honored with China reform friendship medals.

Chinese leaders presented the medals to the prize winners.

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18/12/2018

Xi Jinping: The man who leads China’s reform into a new era

BEIJING, Dec. 17 (Xinhua) — Wang Jun is a deputy editor and main author of the book “A Study of Xi Jinping Thought on Reform and Opening-Up.”

Paper and documents pile up in his office. These are what his team has collected for research in writing the book.

“Xi Jinping is a man whole-heartedly devoted to reform and opening-up,” said Wang, president of the Guangdong Academy of Social Sciences.

In 2018, China celebrates the 40th anniversary of the reform and opening-up, a cause started by Deng Xiaoping and is now being carried forward by Xi.

In late October, Xi came to Guangdong Province. He visited a reform-themed exhibition at the foot of the Lotus Mountain in Shenzhen, spending more than an hour inside the museum halls.

Xi paused in front of a large painting.

It was a morning rush hour scene of the city in the 1980s. A giant poster stood tall before the Shekou industrial zone to constantly remind the city’s early builders to seize the moment and strive for economic miracles.

It was not the first time Xi visited Shenzhen, a prominent test-bed of China’s reform and opening-up.

“Coming to Shenzhen, Guangdong again (because) we want to declare to the world that China will never drag its feet on reform and opening-up! China is certain to show the world impressive new achievements in the next 40 years!” Xi said.

Six years ago, when Xi was elected general secretary of the Communist Party of China (CPC) Central Committee, reform entered what many people call a “deep-water” zone. The CPC faced arduous challenges in reform, some foreign media claimed.

Xi has withstood the pressure and led China to achieve so much, Wang said.

The Chinese economy is being transformed from fast growth to high-quality development. In 2017, the growth picked up for the first time in six years, reaching 6.9 percent, way above the 3.7-percent global economic growth.

Over the past six years, more than 70 million new jobs have been created, more than the population of Britain. The size of the Chinese middle-income group has swelled to 400 million, constituting a huge consumer market in the world.

Overseas media called Xi “a far-sighted reformer” and “a serious reformer who built a unique path for China’s future” whose clear vision for reform “has inspired the nation.”

DETERMINED TO REFORM

When China began the reform and opening-up in 1978, Xi was studying chemical engineering at Tsinghua University. His father, Xi Zhongxun, was then the Party chief of Guangdong Province.

The elder Xi had high hopes for reform. He sought Deng’s permission for “taking the first step” to set up a special economic zone that would break the new ground for reform.

The father’s courage and sense of mission left a deep impression on the son.

In the early 1980s, as Xi senior was promoted to Beijing, Xi Jinping was sent down to work in the county of Zhengding, Hebei Province. He began his reform experiments there, starting with the rural land contract trial, being the first in Hebei to adopt this practice already tested in southern provinces.

As the county Party chief, Xi already knew how hard it was to press ahead with reforms. He was critical of the “middle-level obstruction” issue and solved it by appointing willing and competent cadres to push forward reforms.

Xi’s reputation as a reformer was reinforced as he advanced his political career. In Ningde, Xiamen and Fuzhou of Fujian Province, Zhejiang Province and Shanghai Municipality, he kick-started innovative reform strategies to tackle different sorts of challenges.

“In a real sense, Xi comes from a reformer family. More important, Xi is deeply committed to reform,” said Robert Kuhn, a leading U.S. expert on China and chairman of the Kuhn Foundation, adding that when they met in 2005 and 2006, Xi spoke a lot on the importance of “reform in all facets.”

“Xi’s reform is derived from his experience,” said Shi Zhihong, a former deputy director of the Policy Research Office of the CPC Central Committee. “He knew that the rigid old paths would lead nowhere, and reform was a must.”

In 2012, reflecting on China’s reform cause, Xi spoke highly of Deng. “If there were no Deng who guided our Party to make the historic decision to reform and open up, we couldn’t have achieved this much,” Xi said.

“The reform and opening-up is a great awakening of our Party, and it gave rise to great theoretical and practical innovations,” he added.

Xi’s thinking and practices of reform in provinces have been compiled into books, from which observers say one can trace the roots of China’s comprehensive deepening reform that is being rolled out in the new era.

“FIFTH MODERNIZATION”

On Nov. 15, 2012, Xi met the press right after being elected general secretary of the CPC Central Committee. He spoke of the need to adhere to reform and opening-up to continue liberating social productive forces, resolve people’s difficulties in life and work and stay committed to the path of common prosperity.

At the moment, Xi’s resolve to carry on the reform could not be more obvious. But Xi knew how hard it would be. All low-lying fruits have been picked, what is left are hard bones, he said.

People following Xi in his reforms need to be brave enough to cross hurdles in thinking and break through the blockade of vested interest.

Xi came to Guangdong in his first domestic inspection tour after assuming the Party’s top post. It was not by coincidence that in 1992 Deng visited Guangdong in his now well-known “southern tour.” Deng’s talks during the tour were instrumental in advancing the reform and opening-up.

In his 2012 visit, Xi paid tribute to Deng’s bronze statue. “Reform and opening-up is a make-or-break move that decides China’s destiny,” Xi said. “There is no pause or backtrack.”

The Financial Times said, “Mr. Xi is hardly the first Chinese leader to talk about the need for reform. But the tone of the pronouncements emerging from his weekend trip has been more forceful than those employed by past leaders.”

For Xi, reform must be carried on along the path of socialism with Chinese characteristics. Neither the old path nor the detour could work.

Xi insisted that reform shall suit China’s own needs for change, and China would not reform to make others happy. “Only the wearer knows whether the shoes fit or not,” he said.

The overall goal of deepening reform is to improve and develop the system of socialism with Chinese characteristics and modernize China’s system and capacity for governance.

This overarching objective is described by observers as China’s “Fifth Modernization” drive.

According to Xi, the reform must balance several pairs of relations: between mind emancipation and truth-seeking; overall advancement and breakthroughs in key areas; top-level design and crossing the river by feeling the stones.

He Yiting, vice president of the Party School of the CPC Central Committee, said Xi’s thought on reform has enriched and developed the theory of socialism with Chinese characteristics.

Zheng Yongnian, director of the East Asian Institute at the National University of Singapore, said Xi answered the questions related to what to change, how to change in the new round of reform and who will implement it.

In November 2013, Xi presided over the third plenary session of the 18th CPC Central Committee that issued an extensive reform plan and a seven-year implementation timetable.

China’s deepening reform in all areas has caught the world’s attention. Some overseas media said the reform gave a big impetus to China’s lasting and inspiring rise.

Since then, the succeeding Party plenums have all stressed deepening reform, which constitutes a prominent fixture in Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.

Xi has become the leader in China’s new round of reform and opening-up.

LEAD BY ACTION

After the third plenary session of the 18th CPC Central Committee, Xi served as the head of a leading group on deepening overall reform. When it was changed to a committee, he remained as the chair.

In the meantime, he also chairs a number of high-level committees and commissions on areas such as law-based governance, foreign affairs, cyber-security and informatization.

By heading these groups, Xi can have face-to-face discussions with people working in different areas and better learn about actual situations.

Xi went through each version of major reform documents, added his personal insights and pushed for major progress.

Take the market’s role as an example. In 2013, the Party decided to let the market play a “decisive” role in allocating resources. It sent a strong signal of policy adjustment as the original wording — “basic” — had remained unchanged since 1992.

When drafting the change, some people said it was still too early to make such a big leap. It was Xi who decided to make the change.

“Many of the major reforms would not have been possible if it weren’t Xi,” said an academic who was involved in drafting the document.

Xi led reform on multiple fronts to achieve breakthroughs: the gaps between urban and rural populations have been narrowed, the two-child policy initiated and pushed to yield results, splurge on government bills curbed, and vested interests broken up.

He constantly called on officials to have the perseverance to hammer away at obstacles until a task is done and make concrete, meticulous and effective efforts in reform.

Between late 2012 and late 2017, Xi took 50 domestic inspection tours, in which he researched and pushed for reform.

The reform progress encompasses an expansive scope of fields.

In the economy, he made the judgment of new normal, initiated the supply-side structural reform and drew a clear line between the government and the market.

In science, he set the goal of turning China into one of the world’s science centers and an innovation high ground.

He led the anti-corruption fight to form a crushing tide and has won a sweeping victory.

He launched a major institutional reform to reshape Party and state organs, including the establishment of the National Supervisory Commission and the Commission for Law-based Governance of the CPC Central Committee.

Reform progress is reported on other fronts: people have stronger cultural confidence and sense of fulfillment; environmental protection systems are improved; and the armed forces have been reshaped.

In the five years since late 2012, more than 1,500 reform measures were issued. Reform picked up pace after the 19th CPC National Congress in late 2017.

In his 2018 New Year speech, Xi called on the Chinese people to “cut paths through mountains and build bridges across rivers” to advance reform.

Wang, the book author, said Xi has made breakthroughs in a number of tough and stalemated issues.

“Xi has been and is a remarkably comprehensive reformer, whose reforms are broader in scope than those of prior generations,” Kuhn said.

FOR THE PEOPLE

In April, Xi told visiting UN Secretary-General Antonio Guterres that “everything we do is for people’s happiness and national rejuvenation and to seek common ground for the world.”

Xi has been stressing that reform should focus on what the people care about and expect the most. The aim, he says, is to give the people a stronger sense of fulfillment.

That may be felt more directly from the rise of earnings. The average income of Chinese grew by 7.4 percent annually over the past six years, eclipsing the GDP growth.

In October, wage-earners hailed a personal income tax reform which exempts those who earn less than 5,000 yuan (725 U.S. dollars) a month.

Many migrant workers also made it to the country’s expanding middle-income group.

Zou Bin is one of them who benefit from the reform. He rose from laying bricks at construction sites to heading a team in the Fortune 500 firm China Construction Group as a project manager.

This year, Zou started serving as a deputy to the National People’s Congress, the top legislature. His first legislative proposal was, not surprisingly, about deepening construction labor reforms.

Poverty reduction is another milestone. In the past six years, about 70 million rural people had been lifted over the poverty line.

William Jones, Washington bureau chief of the Executive Intelligence Review news magazine, said ending poverty had long been regarded a major task for humanity but until recently, was seen as a Utopian dream.

“With China, that dream is now becoming a reality,” he said.

Under Xi’s lead, China’s social security network has expanded, with the basic medical insurance covering 1.3 billion people and the social old-age insurance covering more than 900 million.

This summer, a domestic film shot up to box office stardom. “Dying to Survive” tells a fictional story of a shopkeeper who illegally imports cheap Indian drugs and sells them to cancer patients in China.

The blockbuster touched a public sore point of costly drugs. But fortunately, the issue is being addressed.

Policies have been introduced to exempt import tariffs on many cancer drugs, and efforts are on-going to bring more life-saving medicines into the medical insurance program.

Xi’s reform also aims to nurture a great environment to conduct business.

The World Bank Group said in its annual “Doing Business Report” that China advanced to a global ranking of the 46th this year, up from the 78th last year, as the country implemented the largest number of reforms in the East Asia and Pacific region.

The “2018 China Business Report” by the American Chamber of Commerce in Shanghai also found that 83 percent of respondents in manufacturing sector and 81 percent in retail achieved profit, while 61.6 percent of companies expected to increase their China investment in 2018.

Private sectors in China have entered a new phase of development.

In 2018, a total of 28 Chinese private companies were enlisted in the Fortune 500, compared with a lone company in 2010.

CONNECTING THE WORLD

China’s reform has benefited the world. China contributed to global growth by an annual average of 18.4 percent in the past 40 years, second only to the United States, according to the National Bureau of Statistics.

In 2017, China accounted for 27.8 percent of global economic growth, more than that of the United States and Japan combined.

CRRC Corporation Limited (CRRC), the world’s leading supplier of rail transit equipment, has improved infrastructure and brought jobs to more than 100 countries and regions since it was founded three years ago.

“President Xi visited our workshop in 2015, asking us to speed up innovation and create a brand for ‘made-in-China’ products, which has promoted our modern enterprise system reform and CRRC’s integration with the global economy,” said a CRRC executive.

Facing mounting protectionism and a stagnant world economy, Xi proposed to foster a new type of international relations featuring win-win cooperation and follow the principle of achieving shared growth through discussion and collaboration in engaging in global governance.

An important feature of Xi’s reform is the integration of promoting domestic reform with the participation of global governance reform, said Shi.

Xi’s proposition of building a community with a shared future for humanity reflects the pursuit of common values, Shi added.

When Xi was governor of east China’s Fujian Province 18 years ago, he pushed for a demonstration project to help the Eastern Highland Province of Papua New Guinea with Juncao and dry-land rice planting.

The Juncao technology cultivates edible and medicinal mushroom from special wild grass so that trees do not need to be cut for mushroom growing. The technology has brought the hope of poverty eradication across the globe.

The success of Juncao is an epitome of the advancement of the Belt and Road Initiative, proposed by Xi to promote a shared prosperity of humanity by cooperation on trade and infrastructure. So far, more than 140 countries and international organizations have signed agreements with China to jointly build the Belt and Road.

Ecological degradation is a key global challenge. Xi attended the UN Climate Change Conference in Paris in November 2015. China is one of the first countries to sign the Paris Agreement on climate change. Xi personally handed over China’s instruments of joining the Paris Agreement to then UN Secretary-General Ban Ki-moon in September 2016.

In the past six years, China has kept its promise to protect the Earth through deepening domestic reforms, including the implementation of 10 air pollution prevention and control measures, the promotion of a river chief system and introduction of a national park mechanism. Many of the reforms were initiated by Xi.

Xi brought China’s opening up to a new level. He designed and pushed forward the opening of the world’s first import-themed national-level expo. At the China International Import Expo, he reiterated opposition to trade protectionism and commitment to an open world economy.

The expo, held in Shanghai in November this year, was attended by over 3,600 companies, including nearly 180 American companies. Agreements on intended one-year purchases of goods and services were valued at 57.83 billion U.S. dollars.

China announced a series of measures to further open up its economy, including broadening market access, easing foreign equity restrictions, lowering automobile import tariffs and increasing imports. The number of free trade zones has risen to 12 in five years.

“Openness brings progress while seclusion leads to backwardness,” Xi said.

Xi led China to be more involved in international economic cooperation, turning the country into a more mature modern market economy, said Wang.

ON THE WAY

“Xi has transformed China at an astonishing pace,” Geoff Raby said in his column in the Australian Financial Review. “At over 8,000 U.S. dollars per capita, China is now at the higher end of the World Bank’s middle-income economy range, and some 40 percent of that was added during Xi’s tenure.”

“This is the new order in Asia. It is no longer emerging, it has arrived,” he said.

The People’s Republic of China will celebrate its 70th anniversary next year. The Chinese nation with a history of humiliation has stood up, grown rich and is becoming strong.

Xi’s reform has laid a firm foundation for the Chinese nation’s rejuvenation. It will be the first time in human history that a country of more than 1 billion people march into modernization as a whole.

China’s reform has inspired the world: developing countries can walk a new path to modernization that is different from the West. It breaks the “end of history” and “Western-centered” mentalities.

The year 2018 also marks the 200th anniversary of Karl Marx’s birth. China’s successful practice has injected new vitality into the classic theory named after him.

What Xi aims to develop is a model of how a rising country can avoid confrontation with an established one. It will show that different civilizations can enrich exchanges and co-exist peacefully.

The reform is still on the way. It is no easy task to change the world’s biggest developing country. China’s per capita GDP has surpassed 8,000 U.S. dollars, yet far from 57,000 dollars of the United States.

China is still facing an unbalanced industrial structure, weak innovation and financial risks.

Xi has many challenges ahead. With great courage, he is ready to lead the Party and the country to forge ahead with the reform.

“A lot of progress has been made over the past few years,” Xi said. “But much can still be achieved as we embark on the new journey.”

15/12/2018

China holds gala for 40th anniversary of reform, opening up

CHINA-BEIJING-REFORM-OPENING UP-ANNIVERSARY-GALA (CN)“Our 40 Years,” a grand gala in celebration of the 40th anniversary of China’s reform and opening up, is held in Beijing, capital of China, Dec. 14, 2018. Xi Jinping, Li Keqiang, Li Zhanshu, Wang Yang, Wang Huning, Han Zheng and Wang Qishan were among the Communist Party of China (CPC) and state leaders who joined more than 3,000 people to watch the gala at the Great Hall of the People. (Xinhua/Xie Huanchi)

BEIJING, Dec. 14 (Xinhua) — A grand gala was held in Beijing on Friday evening in celebration of the 40th anniversary of China’s reform and opening up.

Xi Jinping, Li Keqiang, Li Zhanshu, Wang Yang, Wang Huning, Han Zheng and Wang Qishan were among the Communist Party of China (CPC) and state leaders who joined more than 3,000 people to watch the gala at the Great Hall of the People.

On the balcony of the 2nd floor of the hall hung a banner, which read “rally closely around the CPC Central Committee with Comrade Xi Jinping at the core, hold high the banner of socialism with Chinese characteristics, follow the guidance of Deng Xiaoping Theory, the Theory of Three Represents, the Scientific Outlook on Development and Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and unceasingly advance reform and opening up in the new era”.

At 7:55 p.m., Xi and other senior leaders walked into the hall, shook hands with representatives of people awarded for their outstanding contributions to reform and opening up, amid warm applause throughout the venue.

Named “Our 40 Years,” the gala was divided into Overture, Part One, Part Two and Epilogue. Part One replayed the grand changes that have taken place in China since the beginning of reform and opening up.

The part culminated with a poetry recital titled “The Great Awakening,” which expressed Chinese people’s gratitude and admiration for reform and opening up.

Part Two comprehensively showed how socialism with Chinese characteristics entered the new era under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.

The gala ended with a song expressing the promising future for reform and opening up.

Through art forms such as singing, dancing, plays and poetry recitals, the gala gave full expression of the determination and confidence of the Chinese people to carry out reform and opening up all the way under the strong leadership of the CPC Central Committee with Xi Jinping at the core.

12/12/2018

China issues white paper on human rights progress over 40 years of reform, opening up

BEIJING, Dec. 12 (Xinhua) — China on Wednesday issued a white paper on progress in human rights since its reform and opening up drive.

The white paper, titled “Progress in Human Rights over the 40 Years of Reform and Opening Up in China,” said reform and opening up has helped liberate and develop social productive forces, opened up a path of socialism with Chinese characteristics, and ushered in a new chapter in the development of human rights.

Over the four decades, the Chinese people have worked hard as one under the strong and coherent leadership of the Communist Party of China (CPC), the white paper said. Huge changes have taken place, and living standards have significantly improved.

The CPC has always prioritized the people’s interests, ensuring that reform is conducted for the people and by the people, and that its benefits are shared by the people, it added.

China has showed respect for, protected and promoted human rights in the course of reform and opening up, blazing a trail of human rights development that conforms to the national conditions, and created new experiences and made progress in safeguarding human rights, it said.

China has summed up its historical experience, drawn on the achievements of human civilization, combined the universal principles of human rights with the realities of the country, and generated a series of innovative ideas on human rights, it said.

China has brought into being basic rights that center on the people and prioritize their rights to subsistence and development, and proposed that China should follow a path of comprehensive and coordinated human rights development under the rule of law.

The white paper said China has carried out extensive exchanges and cooperation in the field of human rights and earnestly fulfilled its international human rights obligations.

04/12/2018

Red Cross Society of China moves to reform

BEIJING, Dec. 3 (Xinhua) — A reform plan of the Red Cross Society of China (RCSC), approved recently, is expected to make the organization more effective, an RCSC official told Xinhua Monday.

Under new circumstances, the mission and targets of the RCSC have undergone profound changes, and demand and approaches for humanitarian services are bound to transform, the official said.

The world also places more expectation on China to play a bigger role in global affairs, and building of a community with a shared future for humanity offers the RCSC a broader field to play a role in, and places higher demands on its capacity and vigor, according to the official.

Only through exploring mechanisms of more efficiency, transparency and standardization, as well as solving problems that affect the Red Cross work can the RCSC better perform its duties, the unidentified official said.

The reforms include pushing forward innovation in administrative organizations, human resources and operation of the RCSC, in order to led Red Cross societies at all levels become more closely linked to the public and have more transparency and credibility, the official said.

“All sectors of the society will be encouraged to take part in our activities,” said the official.

The official said the RCSC would stay people-focused as it worked on emergency rescue, humanitarian aid, voluntary blood donation and organ donation.

The RCSC has also agreed to improve its information disclosure by posting receipts and disbursements of funds and goods on a unified information platform, accepting public supervision.

24/06/2016

Two stumbles forward, one back | The Economist

LAST November, two days after India’s ruling party suffered a drubbing at local polls in the state of Bihar, the government unexpectedly opened a dozen new industries to foreign direct investment (FDI). A gushing official called it “the biggest path-breaking and the most radical changes in the FDI regime ever undertaken”.

On June 20th, two days after Raghuram Rajan, the respected governor of India’s central bank, abruptly announced that he would soon step down, the government covered its embarrassment with another impromptu salute to FDI. The slim package of enticements, amounting to a slight lowering of barriers in some of the same industries, has made India “the most open economy in the world for FDI,” said the office of Narendra Modi, the prime minister.

Hyperbole is not unexpected from a government keen to burnish its liberalising credentials. But it has not lived up to its cheery slogans (“Startup India”, “We Unobstacle”, “Minimum Government, Maximum Governance”). Two years after clinching a sweeping electoral mandate, and with the opposition in disarray, Mr Modi’s reform agenda should be in full swing. Instead, as with previous governments, his ill-focused initiatives have run up against India’s statist bureaucracy.

To be fair, much of what has been done is useful. Corruption has been stemmed, at least at ministerial level. A vital bankruptcy law has been approved. Yet for all the evidence that Mr Modi’s team is doing a better job running the existing economic machinery, it has shown limited appetite for overhauling it.

Pessimists see Mr Rajan’s departure as evidence of a further wilting of ambition. After all, as a former chief economist of the IMF, he is an enthusiastic advocate of structural reform. Then again, at the central bank he has focused chiefly on bringing down inflation. Optimists hope he is being eased out because of his habit of speaking his mind, thereby occasionally contradicting the government line, rather than to pave the way for retrograde policies.

Thanks to a mix of lower oil prices and prudent fiscal policies (and perhaps also flawed statistics) the economy grew by 7.9% in the first quarter, compared with the same period the year before, the fastest pace among big economies. Ministers think further acceleration is possible.

That may prove difficult. India’s public-sector banks, which hold 70% of the industry’s assets, are stuffed with bad loans; the central bank reckons that some 17.7% are “stressed”. That Mr Rajan forced them to disclose this fact will not have endeared him to politically connected tycoons now being badgered to repay the banks. Bank shares rose after he said he was leaving, presumably in the hope that his successor will go easy on them. Rating agencies fret that they will still need recapitalising, blowing a hole in the government’s finances. In the meantime, credit to industry has all but ground to a halt.

India’s overweening bureaucracy is another drag on growth. Copious red-tape and poor infrastructure put India 130th out of 189 countries in the World Bank’s “Ease of doing business” rankings. Getting permits to build a warehouse in Mumbai involves 40 steps and costs more than 25% of its value, compared with less than 2% in rich countries. It takes 1,420 days, on average, to enforce a contract.

A slew of liberalising reforms in 1991, when India was in far worse shape than now, were left unfinished as the economy gradually recovered. Whereas product markets were freed from the “licence Raj”, which no longer dictates how much of what each factory can produce, inputs such as land, labour and capital are still heavily regulated. Having once sought to prise those open, the Modi government now encourages state governments to take the lead with their own reforms.

One result is that there is no proper market for land: businesses that want to set up shop are best off wooing state governments to provide some. Chief ministers with a presidential approach (a model Mr Modi espoused in his previous job running Gujarat) scurry around scouting for plots on behalf of the private sector in a manner that would have seemed familiar to the central planners of yore.

That India is pro-business but not necessarily pro-market is a frequent refrain. “The government wants to create jobs, not the environment in which job-creation flourishes,” says one investor. Special economic zones are set up as sops, sometimes to entice single companies. Even big foreign investors are essentially told what to do: Walmart can only open cash-and-carry stores closed to the general public, Amazon must sell mostly other merchants’ goods rather than its own, and so on.If businesses cannot get things done themselves, even the most energetic politician will struggle to set up enough factories to general public, Amazon must sell mostly other merchants’ goods rather than its own, and so on.

Source: Two stumbles forward, one back | The Economist

21/10/2014

India Steps Closer to Ending 40-Year-Old Monopoly on Coal – Businessweek

India stepped closer to ending a four-decade-old government monopoly on mining and selling coal as Prime Minister Narendra Modi seeks to tackle fuel shortages.

India Coal Mine

The government approved a decree enabling it to permit commercial mining in future, Finance Minister Arun Jaitley said at a briefing in New Delhi yesterday, without giving a timeline. The ordinance also allows auctions of coal mines to private companies for their own use, he said.

Modi made curbing blackouts a priority after sweeping to office in May on a pledge to revive growth in Asia’s third-largest economy from near the slowest pace in a decade. State-owned Coal India Ltd. (COAL) has missed output targets in at least the past four years, and easing its grip may allow companies such as Sesa Sterlite Ltd. (SSTL) and NMDC Ltd. (NMDC) to profit from the world’s fifth-biggest reserves.

Enabling private companies to mine and sell coal would be “one of the key game-changing reforms,” said Sonal Varma, an economist at Nomura Holdings Inc. in Mumbai. “Fuel availability has been a big concern for the economy.”

Opening up the coal industry risks stoking protests by some of Coal India’s about 325,000 workers and executives, at the same time as the government prepares to sell a 10 percent stake in the company that would fetch about 228 billion rupees ($3.7 billion).

Coal India accounts for more than 80 percent of the country’s production. The government wants to spur competition in the industry, Jaitley told the NDTV 24×7 television channel today.

via India Steps Closer to Ending 40-Year-Old Monopoly on Coal – Businessweek.

21/10/2014

China’s reform tally since November 2013 policy meeting | Reuters

China’s leadership unveiled a blueprint for some of the most comprehensive economic and social reforms in nearly 30 years in November 2013.

Implementation since then has been slow but steady. China has eschewed riskier, game-changing reform but the incremental steps aim to reach enough critical mass to sustain momentum and help the world’s second-largest economy shift down fairly smoothly after decades of investment-fueled growth.

The following are some of the significant steps taken since the Communist Party Central Committee’s Nov 9-12 policy conclave:

OCTOBER, 2014

Oct 16 – The top economic planner is considering tightening rules for bond issues, according to traders and a leaked document.

Oct 11 – The State Council says it will institute a resource tax on coal while eliminating other taxes to simplify the tax structure.

Oct 9 – China levies tariffs on coal imports in a move to reduce the country’s dependence on the polluting energy source.

SEPTEMBER, 2014

Sept 9 – Domestic firms in many areas no longer require government approval to invest overseas but must register their investments with authorities starting Oct 6.

Sept 1 – The budget law is revised to allow local governments to issue bonds directly.

AUGUST, 2014

Aug 29 – The Politburo approves salary cuts for top officials at big state-owned firms to counter graft and income inequality.

Aug 26 – China cuts on-grid prices of thermal electricity from Sept. 1 to reflect a fall in coal prices.

Aug 20 – The government cuts taxes on high-tech companies, abolishes the need for firms to seek approvals in 68 further areas and additionally allows lower levels of government to approve business projects in 19 other areas.

Aug 15 – China eliminates 21 approval processes for a list of industries and lower levels of government are given the right to approve certain projects in an effort to cut red tape.

Aug 12 – China will raise natural gas prices for bulk buyers and non-residential use from Sept. 1 in an effort to reform pricing.

Aug 4 – Foreign firms in China are allowed to use their registered capital to buy stakes in other Chinese companies.

JULY, 2014

July 15 – The state-owned enterprise regulator chooses six state firms to test out reforms expanding the role of private capital in China’s state sector.

July 14 – China loosens currency controls to make it easier for domestic companies and individuals to set up special purpose vehicles (SPVs) for investments overseas.

July 2 – Banks are allowed to set their own exchange rates for the yuan against the dollar in over-the-counter deals with clients.

JUNE, 2014

June 27 – Regulators lower the threshold for banks to enter the foreign exchange market and removes a layer of approvals.

June 25 – China gives the greenlight to three banks wholly funded with capital from private firms, to be the country’s first private lenders.

MAY, 2014

May 21 – The experiment for China’s first municipal bond market is launched.

May 21 – Private firms are invited to invest in 80 major projects in the energy, information and infrastructure sectors.

May 16 – Financial regulators tighten oversight of interbank loans.

May 16 – China sets up international energy trading center where crude oil futures will be traded for the first time.

May 15 – Securities firms get the go-ahead to expand into new businesses such as the online financial services market.

May 6 – State-owned enterprises to increase dividend payouts by 5 percentage points to up to 25 percent of their profits.

APRIL, 2014

April 23 – Premier Li Keqiang says China will allow private investment in 80 projects in energy, information and infrastructure.

April 22 – Changes to the environmental law seeking stiffer penalties for polluters submitted to parliament.

April 11 – Chinese firms can invest up to $1 billion overseas without seeking approval, China’s top planner says.

April 10 – China allows cross-border stock investment between Shanghai and Hong Kong.

April 9 – The government relaxes price controls over non-public hospital services.

April 2 – The government says will fast-track some spending and cut taxes for small firms, as a way of supporting the weakening economy.

MARCH, 2014

March 31 – Britain and China sign an agreement to set up a clearing service for offshore yuan trading in London. That follows a similar agreement with Germany.

March 24 – China simplifies review procedures for mergers and acquisitions.

March 21 – The securities regulator issues rules for a pilot program allowing listed companies to issue preferred shares.

March 20 – The foreign exchange regulator relaxes curbs on foreign investment in China’s stock market.

March 20 – PetroChina, China’s biggest oil and gas producer, is welcoming private investment into oil and gas pipelines in China, according to chairman Zhou Jiping.

March 20 – China lifts ban on equity financing for listed property developers after four years.

March 16 – China sets 2020 targets for urban population growth and registered urban residents.

March 15 – The central bank doubles the yuan currency’s daily trading band against the dollar.

March 11 – Central bank governor Zhou Xiaochuan says China’s deposit rates should be liberalized in one to two years.

March 11 – Development of 3-5 privately-owned banks to be tested in Tianjin, Shanghai, Zhejiang and Guangdong, bank regulator says.

March 11 – The cabinet outlines its healthcare reform plan.

March 7 – Loss-making solar equipment maker misses interest payment in China’s first domestic bond default.

March 5 – Premier Li Keqiang promises to wage a “war” on pollution and reduce the pace of investment to a decade-low.

March 1 -Simplified corporate capital registration comes into force. Government data later show 309,500 new firms were registered in March, up 46 percent from a year earlier.

FEBRUARY, 2014

Feb 26 – Beijing details pension reform that seeks to decrease urban-rural economic divisions before 2020.

Feb 21 – The central bank gives operational details for cross-border yuan deals made through Shanghai free trade zone.

Feb 20 – Sinopec Corp, Asia’s largest oil refiner, says it will sell up to 30 percent of its retail business to private investors in a multi-billion dollar revamp.

JANUARY, 2014

Jan 29 – The cabinet sets up a cross-ministry group to boost development of three service zones in Guangdong province.

Jan 22 – Six teams to supervise economic reforms are set up, with President Xi Jinping and Premier Li Keqiang in charge.

Jan 17 – China’s wealthy eastern province of Zhejiang became the first to implement changes to the one-child policy.

Jan 6 – The cabinet publishes guidelines strengthening regulation of off-balance lending.

DECEMBER, 2013

Dec 11 – Beijing strips 82 powers away from central government ministries. Over 200 administrative approvals are set to be abolished or delegated to local authorities in 2014.

Dec 10 – New standards on performance ratings of officials break the obsession with growth and include such criteria as work safety, innovation, environmental and resource costs.

Dec 8 – The central bank sets guidelines for issuing of interbank certificates of deposit, a step towards allowing markets to determine interest rates.

Dec 4 – The government expands its value-added tax trial to rail transport and the postal service.

Dec 4 – The central bank announces details of financial reform test runs in the Shanghai free trade zone.

NOVEMBER, 2013

Nov 30 – The stock market regulator announces IPO reforms.

Nov 12 – Anhui province, which spearheaded land reform in 1978 announces pilot land reforms, including accelerating the development of large-scale farming, completing land use rights registration before end-2015 and simplifying land transactions.

via Factbox: China’s reform tally since November 2013 policy meeting | Reuters.

24/05/2014

Modi’s Big Chance to Fix India – Businessweek

After five weeks of staggered voting, more than 550 million ballots cast, and almost $5 billion spent, the world’s largest democracy finally has a new leader. Yet the question that has loomed over India’s long campaign remains: What kind of leader is Narendra Modi going to be?

Narendra Modi speaks to supporters in Vadodara, India, on May 16

Modi fought an impressive campaign focused mostly on the right issues. He successfully cast the election as a referendum on who could better deliver jobs, government services, and economic growth: himself or Rahul Gandhi, the ruling Congress party’s heir apparent. The landslide victory of Modi and his Bharatiya Janata Party—the biggest for any party since 1984—testifies to Indians’ hunger for decisiveness and efficiency after years of policy drift and corruption scandals.

Yet voters have little idea how Modi will govern. He has given no sign of how far he’ll challenge his own supporters on economic and social policies. Investors expecting miracles are in for a letdown, because India’s political system is bound to intervene. According to JPMorgan Chase (JPM), about 70 percent to 80 percent of regulatory and other roadblocks impeding big industrial projects aren’t within Modi’s power to remove. Even so, he needs to make progress where he can.

A good place to start would be to keep an election promise to introduce a combined goods and services tax—something Modi’s own party has long opposed, because it would force revenue losses on state governments. (Modi could offset some of the losses using central revenues.) He should move to phase out petroleum subsidies. He should give state and local governments greater flexibility in regulating labor markets, land sales, and more. Economic competition among the states is key.

Above all, India’s new leader must also reach out to the country’s Muslims—assuring them that he recognizes they are full and valued citizens entitled to an equal measure of security, trust, and respect. Modi’s campaign was based in part on a simple point: India can no longer afford to muddle through, endlessly avoiding difficult decisions. Now it’s time to deliver.

via Modi’s Big Chance to Fix India – Businessweek.

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05/03/2014

How Committed Is China to Reform? A Tip From ‘The Old Perfessor’ – China Real Time Report – WSJ

One of the most important questions in the global economy is the commitment to reform by China’s new leaders. Are they more reform-oriented than the last crew, who talked a lot about economic reform but often didn’t carry through?

China Real Time did a quick analysis based on the philosophy of Casey Stengel, the garrulous former manager of the New York Yankees and Mets known by the nickname “The Old Perfessor.” As Stengel often said, “You can look it up.” So we did.

In his just-delivered 2014 work report, Premier Li Keqiang, used the word “reform” 84 times in his lengthy address.  Last year, former Premier Wen Jiabao used “reform” a mere 51 times.

“Transformation?” Mr. Li, 17; Mr. Wen, 5.

What would Mr. Li like to reform? Among many other things: socialism, markets, government, agriculture, science, investment, taxes, finance and schools.

And what would he transform? Industry and foreign trade mostly.

It won’t be easy to do all this, Mr. Li warned:  “China’s reform has entered a critical stage and a deep water zone,” he told delegates to China’s rubber-stamp parliament, the National People’s Congress. “We  must rely fully on the people, break mental shackles and vested interests with great determination.”

Or as  Mr. Stengel reportedly said: “Without losers, where would the winners be?”

via How Committed Is China to Reform? A Tip From ‘The Old Perfessor’ – China Real Time Report – WSJ.

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