Re­form div­i­dends

China Daily (Hong Kong) - - FRONT PAGE - EDDY LI The au­thor is vice-pres­i­dent of the Chi­nese Man­u­fac­tur­ers’ As­so­ci­a­tion of Hong Kong.

Mar­ke­ti­za­tion on the main­land will ben­e­fit HK-funded en­ter­prises.

It has been al­most a month since the Third Ple­nary Ses­sion of the 18th CPC Cen­tral Com­mit­tee ended — but new eco­nomic re­forms an­nounced af­ter the ple­nary will have con­sid­er­able fu­ture benefits. As some­one rep­re­sent­ing the busi­ness com­mu­nity, I pay close at­ten­tion to eco­nomic poli­cies. The poli­cies ad­vo­cated by the cen­tral govern­ment have two key as­pects: One is “mar­ke­ti­za­tion” — the greater use of free mar­ket forces. The other is the eco­nomic op­por­tu­ni­ties which will emerge as State-owned en­ter­prises go through sub­stan­tial re­forms. Both poli­cies will be ben­e­fi­cial to Hong Kong.

Mar­ke­ti­za­tion is what the Hong Kong com­pa­nies on the main­land have been long­ing for. This is be­cause they have suf­fered from in­ter­ven­tion by lo­cal gov­ern­ments. At the be­hest of gov­ern­ments, com­pa­nies were obliged to meet many re­quire­ments, even though these some­times con­tra­dicted mar­ket de­mands. Now, the cen­tral govern­ment has made a de­ci­sion of great sig­nif­i­cance “to let the mar­ket de­cide the al­lo­ca­tion of re­sources”. This shows its de­ter­mi­na­tion to re­duce govern­ment in­ter­ven­tion and pro­mote mar­ket forces.

This shift of fo­cus will cer­tainly gen­er­ate tremen­dous im­pe­tus for pri­vate com­pa­nies, in­clud­ing Hong Kong-funded ones. In the

t‘ In he past, be­cause of the ab­so­lute mo­nop­oly of State-owned en­ter­prises in many in­dus­tries, the mar­ket po­si­tion of Sta­te­owned and pri­vate com­pa­nies was very un­equal. To­day, they can com­pete with each other more fairly fol­low­ing the govern­ment’s im­ple­men­ta­tion of mar­ke­ti­za­tion. Not only has this pro­vided more op­por­tu­ni­ties to pri­vate com­pa­nies, but it will en­cour­age the in­te­gra­tion of China’s econ­omy with the rest of the world.”

past, be­cause of the ab­so­lute mo­nop­oly of State-owned en­ter­prises in many in­dus­tries, the mar­ket po­si­tion of State-owned and pri­vate com­pa­nies was very un­equal. To­day, they can com­pete with each other more fairly fol­low­ing the govern­ment’s im­ple­men­ta­tion of mar­ke­ti­za­tion. Not only has this pro­vided more op­por­tu­ni­ties to pri­vate com­pa­nies, but it will en­cour­age the in­te­gra­tion of China’s econ­omy with the rest of the world. In ad­di­tion, Hong Kong is ex­pe­ri­enced in help­ing pri­vate com­pa­nies en­ter the in­ter­na­tional mar­ket, so many op­por­tu­ni­ties will de­velop in Hong Kong.

But a good pol­icy is only ef­fec­tive when it can be im­ple­mented prop­erly. From my point of view, the suc­cess of mar­ke­ti­za­tion re­quires a com­plete le­gal sys­tem. It de­pends on the ef­fec­tive­ness of anti-cor­rup­tion mea­sures, be­cause cor­rup­tion is a ma­jor fac­tor hold­ing China back. This was also clearly noted in the Global Com­pet­i­tive­ness Re­port re­leased by the World Eco­nomic Fo­rum a cou­ple of months ago — in which China was ranked 29th.

For­tu­nately, the re­port on ju­di­cial re­form, an­other sig­nif­i­cant as­pect of the re­cent re­forms, clearly states that the im­ple­men­ta­tion of in­de­pen­dent ju­di­cial sys­tem re­lies on the guar­an­tee of ju­di­cial rights. The ple­nary re­port used ap­prox­i­mately 1,300 words to fo­cus on anti-cor­rup­tion strate­gies in the fu­ture, out­lin­ing con­crete reg­u­la­tions for civil ser­vants and es­tab­lish­ing anti-graft teams to deal with un­de­sir­able work habits. These in­clude us­ing money to gain ad­van­tages, abus­ing power, bribery, and ex­ces­sive bu­reau­cracy and ex­trav­a­gance.

If the govern­ment suc­ceeds in this area, then law-obey­ing Hong Kong en­ter­prises will ben­e­fit. The cen­tral govern­ment should, there­fore, at­tach greater im­por­tance to anti-graft mea­sures. In­spir­ing slo­gans are point­less with­out stricter law en­force­ment.

Eddy Li

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