Chinese Mandarin - How Chinese bumblebee ignores economic laws

BIZCHINA / Weekly Roundup

How Chinese bumblebee ignores economic laws

By Khalid Malik (China Daily)
Updated: 2007-07-04 15:45

A resident working in Shanghai can afford good health and education. But
a poor worker in Gansu needs to rely on the central government for
transfers of resources. The feature of China's previous success, which
was heavy decentralization, needs some correction because the State is
needed much more now in balancing these inequalities.

Another challenge is how to revamp China's healthcare system as 80
percent of the rural population and 50 percent of the urban population
are entirely uninsured. Out-of -pocket spending on medical costs amounts
to 60 percent of total costs nationally, and 90 percent in rural areas.

Moreover, 70 percent of those refusing hospitalization cite cost as a
major reason. Health costs are now responsible for 33 percent of new
poverty. The maternal mortality rate in Shanghai is 9.6 out of 10,000
births, in Guizhou it's 111.0, and in the Tibet Autonomous Region even
higher. Migrant women represent only 10 percent of urban pregnancies, but
two-thirds of maternal mortality.

Related readings:
China's economy to grow 10.9% in 2007
Central bank vows tight policy to rein in economy
EU mulls giving China market economy status: WSJ
Economy to sustain fast growth for 2 more decades

These are challenges which the Chinese government is very aware of as the
country starts what could be considered its third phase of growth and
development.

Yes, the growth rate will continue for the simple reason that there are
still inefficiencies in the system.

As China develops better policies, the inefficiencies will be corrected
and growth will continue. The 11th Five-Year Plan (2006-10) evidences a
very conscious link between new shifts in balancing development and
reducing urban-rural gaps as well as links with new institutions.

There's a clear recognition that China must adjust current institutions
to deliver on promises. They need to manage a more balanced development.
This is not happening right now.

Unification of the rural and urban economies will bring benefits of scale
and efficiency when the time comes. Right now they are segmented, and
there is a lot of debate on how to unify the service part. In fact, China
needs to unify the production systems part.

Structurally marketization is making traditional economic institutions
increasingly important. For example, the stock market needs better
regulation and more transparency.

If you look at the coastal regions, 80 to 90 percent of new growth is
market driven. But for the less developed northeast provinces, only 40
percent of new growth is market driven. So as less developed regions
catch up, there's a lot of potential.

Given the strong economic fundamentals, if realignments succeed, this may
well be only the beginning of China's growth. So Deng Xiaoping's
prediction that the well-off xiaokang society would be achieved by 2020
is likely to happen.

Policies are moving in the right direction. With the "new socialist
countryside", China's goals are very similar to the UN's Millennium
Development Goals.

1 2 3 4 5 6 

(For more biz stories, please visit Industry Updates)

Learn Chinese, Chinese Mandarin