Challenges for China’s economic reform: from the

perspective of a holistic approach

Pingfan Hong3rd Annual NYU Conference on Chinese

Capital MarketsDecember 6, 2013

Views expressed here are those of the speaker and they do not represent the views of the UN

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

A holistic approach to China’s economic reform should

ensure:

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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 UnionNorth 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

China’s reform in a global perspective

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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

Goals, strategies and measures for China’s economic reform as

set in recent CPC reform roadmap

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Importance of reform sequencing:Liberalizing interest ratesFloating the exchange rate of

reminbiOpening capital and financial

accounts Integrated reforms in different

sectors: liberalizing interest rates

Reform of banksReform of State Owned

Enterprises

Ensuring consistency in reforming different sectors

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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

Ensuring coherence among reforms of different institutions

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Thank you !