Challenges for China’s
economic reform: from the
perspective of a holistic
approach
Pingfan Hong
3rd Annual NYU Conference on Chinese Capital Markets
December 6, 2013
Views expressed here are those of the speaker and they do not represent the views of the UN
A holistic approach to China’s
economic reform should ensure:
 Clearly defined goals, strategies and
measures
 Consistency in reforming different
markets and economic sectors
 Coherence in reforming different
institutions
 Compatibility to global trends and the
role of China in the world
2
China’s reform in a global perspective
 A world of rapid and constant changes
 Two different types of institutional changes:
Revolution versus reform
 Almost every country undertakes economic reforms:
U.S.: Dodd-Frank Act, Obama Care
Euro area: Bank Union
North Korea and Cuba: Special Economic Zones
 International implications of China’s reform:
In response to international competition (TPP,TTIP)
Reinforce and reshape the global wave of reforms
3
Goals, strategies and measures for
China’s economic reform as set in
recent CPC reform roadmap
 General goal:
improving and developing China’s socialist system
Some specific goals:
market plays decisive role in resources allocation
transform the function of the government
 Strategies:
Top design and “crossing the river by groping the stone under
foot”
Some measures:
Mixed ownership through cross share-holding
“Negative–List ” approach to regulation on market entry
4
Ensuring consistency in reforming
different sectors
 Importance of reform sequencing:
Liberalizing interest rates
Floating the exchange rate of reminbi
Opening capital and financial accounts
 Integrated reforms in different sectors:
liberalizing interest rates
Reform of banks
Reform of State Owned Enterprises
5
Ensuring coherence among reforms
of different institutions
 Economic reform:
Economic freedom, efficiency
 Social reform:
Equity, equality (in rights, opportunity and rules)
 Political reform:
Participatory and democratic governance
The rule of law
 Ecological reform:
Environmental sustainability
 Cultural reform:
Values
6
Thank you !