Chinese leaders do not claim to be great orators, and never make scintillating speeches. But Premier Wen Jiabao’s opening address to the World Economic Forum’s ‘Summer Davos’ meeting in Tianjin at least gave the official view of the challenges facing the People’s Republic as it enters its 60th year.
“2008 could be the most difficult year for China's economy,” Wen said.
“We do face considerable difficulties. First, the world economic
environment is getting tougher and more complex, with exacerbated
financial volatility and notable economic slowdown. Second, pressure
for domestic price rises remains high.
The foundation of agriculture is
still weak. The constraint on development posed by energy and resources
is serious. Some industries and businesses are having difficulties with
production and management, while hidden problems still exist in the
financial sector.”
It is a rational and open assessment. China’s goal, reiterated by Wen,
is to build “a prosperous, strong, democratic, culturally advanced and
harmonious country.” But several years of sustained economic growth
have caused significant imbalances. “There are heavy population,
resources and environmental pressures, as well as many challenges in
employment, social security, income distribution, education and
health,” Wen said, adding that, “Corruption is also a serious problem.”
These statements are not new. Analysts have long noted China’s
structural vulnerabilities, and China’s government itself has not tried
to hide from them. While recognizing the ills, however, the remedies
are rarely discussed in the public domain. Hence, the only hints at
government economic policy are ‘umbrella statements’ such as: “We will
continue to deepen economic reform. We will further improve the basic
economic system, deepen reform of the fiscal, taxation and banking
systems and improve the macro-economic regulation system.”
Wen added that China “will strengthen the protection of intellectual
property” and “provide a better environment for foreign businesses in
China.” It will also “develop financial markets of various types,
promote stable and sound development of the capital markets, improve
the RMB exchange rate regime and gradually make the RMB convertible
under capital accounts.”
We don’t know how or when, but in China that really isn’t the point. The statements have been made.
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