Full Steam Ahead
Effectively tackling resistance to reform will represent a major test of the Chinese Government's wisdom and resolve
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Special> NPC & CPPCC Sessions 2014> Exclusive
UPDATED: March 17, 2014 NO. 12 MARCH 20, 2014
Full Steam Ahead
Effectively tackling resistance to reform will represent a major test of the Chinese Government's wisdom and resolve
By Lan Xinzhen

ONE-STOP SERVICE: A company manager (left) handles a registration procedure at the Shanghai Administration for Industry and Commerce in November 2013 reform (WU ZIXI)

The public is also concerned about reforms of ownership. Premier Li's report vows to formulate measures for non-state capital to participate in investment projects of state-owned enterprises, and allow non-state capital to take on a number of projects in areas such as banking, oil, electricity, railway, telecommunications, resources development and public utilities. The government will formulate specific measures to permit non-public enterprise participation in franchising, to reform the railway investment and financing system, and to open competitive operations in more areas so as to create a platform for the full participation of private capital. In the meantime, China will also strive to improve its property rights system.

Zhao went on to say that although China has announced the introduction of many measures to support development of the non-public economy, the "glass door" for non-public capital to enter state-owned monopoly industries has not yet been broken through. This year the government will take larger strides in this regard.

Zhao once made his own investigations and analyzed the results of online polls conducted by websites of People's Daily and China Central Television. In general, the public eagerly anticipates breakthroughs this year in administrative reform, improvement of the market system, reform of state-owned enterprises, fiscal and tax reform, financial reform, reform for integrated development of urban and rural areas, establishing new institutions for open economy and reform of the ecological progress system.

Strong resistance

"It is not easy to implement these reform measures," said Yang Weimin, deputy head of the Office of the Central Leading Group on Finance and Economic Affairs. "The biggest resistance not only lies in the difficulty and complexity inherent in the reform measures themselves, but also comes from vested interest groups.

According to Yang, after 36 years of development, the benefits of the previous round of reforms have been almost exhausted. Facing problems, old and new, and demands from interests in all areas, the process of implementing reforms for the future is becoming increasingly difficult. From Premier Li's report, people will find that implementation of reform measures have touched a nerve among vested interest groups. To carry out reform measures, China must therefore break through the obstacles presented by mental shackles and vested interests with great determination.

The report meets the demand by last year's CPC plenary session that steps be taken to "make the market play a decisive role in resource allocation." This year, China will cancel or delegate to lower-level governments an additional 200 plus items subject to government review and approval, items over which many government departments are reluctant to lose control.

At a press conference held on March 6, Li Yining, a member of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and a renowned economist, expressed his concerns regarding resistance to reform.

Li said today's reform climate is different from three decades ago, because the problems that most need to be addressed all represent thorny issues. The resistance to reform comes mainly from two areas. First and foremost are the interest groups, as they think reform will damage their interests. The second source is a feature of human nature, namely, people's innate resistance to change. Having become accustomed to one way of doing something and having grown to rely on that system, people are generally loath to try alternative methods.

China needs to shift its focus from management of demand to management of supplies, Li continued. The government must offer better products and services to consumers. It should encourage improvement of product quality, establishment of independent brands and offering products that meet the customer demand.

At an interview with the press on March 8, Chi Fulin, a CPPCC National Committee member and President of the Hainan-based China Institute for Reform and Development, said China must pay special attention to balancing the relationship between various parties and coordination of the reform at this critical moment. As far as reforms go, now comes the hardest part. Given the presence of conflicts of interest within, and indeed between, different departments, industries and localities, any reform must address multifaceted problems and attempt to circumvent the hurdles put in place by vested interests and people's natural resistance to change.

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