State Vital in Guiding Market

The role of government is to promote sound economic development while the market allocates resources, said experts at the China Development Forum Sunday in Beijing.

China will achieve its modernization in an environment characterized by the trend of economic globalization, Vice-Premier Wen Jiabao told delegates during the forum's opening ceremony.

The basic role of the market to allocate resources should be promoted, but it must remain under the macro-control of the State, Wen said.

"Economic globalization does not mean a lessening of the responsibilities and functions of government," Wen said.

In the process of participating in economic globalization, the Chinese Government will further improve its functions, Wen said.

Attending the two-day forum, which ends today, are more than 100 participants, including officials from Chinese government departments, leaders of financial circles and other big companies, chairmen and CEOs of some of the world's top 500 businesses, and representatives from related international organizations and non-governmental organizations, and Chinese and foreign scholars.

It aims to discuss the role of government in the rapidly changing economy.

Chen Qingtai, deputy director of the center, said China is faced with many challenges as a result of globalization, the most critical of which is improving managerial and administrative structures of government.

At yesterday's meeting, leaders of many government departments outlined how their departments can play an improved role in China's economic development.

Xiang Huaicheng, minister of finance, reiterated the government will pursue pro-active fiscal policies to stimulate domestic consumption.

Yang Jingyu, director of the Legislative Affairs Office under the State Council, said China will change laws which are not compatible with the regulations of the World Trade Organization.

Dai Xianglong, governor of the People's Bank of China, said the country will speed up reforms in the banking sector and capital market.

Xie Zhenhua, minister of the State Environmental Protection Administration, said the country will spend more than 700 billion yuan (US$84.5 billion) to improve the environment during the 10th Five-Year Plan period (2001-05).

Delegates also offered their views on China's development policies.

Lawrence Lau, a professor from Stanford University, expressed his support for the government's pro-active fiscal policies.

He said the Chinese Government can afford the debt, and it will not affect inflation.

Fred Bergstan, director of the Institute for International Economics, suggested that China increase the flexibility of the exchange rate.

Nicholas R. Lardy, senior fellow of the Brookings Institution, said more foreign companies should be introduced to China's financial market and the government should encourage companies to issue their own bonds.

(China Daily 03/26/2001)

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