When the world's third largest economy is walking out of the shadow of economic downturn, it has found more problems that demand to be immediately addressed when looking into a long-term picture.
Government and business leaders attending the Boao Forum for Asia, a platform for regional cooperation, agreed that the crisis will be over, but China can not return to the former export-oriented development pattern that depends on the demand in the United States and Europe. Those days are over, and now the country should learn to walk with both legs -- domestic demand and exports.
When unemployment rate started to rise, the government adopted the 4-trillion-yuan stimulus package at the end of last year. It is true that government-sponsored infrastructure projects have created jobs for construction workers, but what will they do when the projects are over?
The stimulus package can not replace a long-term strategy for the country. With 1.3 billion people, China needs sustainable economic growth. Growth creates jobs. Jobs mean stability.
But where can China find the key to sustainable growth and stable employment? This question defies a simple answer.
As an emerging economy on the way of industrialization and urbanization, the situation is extremely complicated and diversified across the nation. However, the bottleneck that affects robust economic growth is more or less the same in many areas. To break them will definitely unleash enormous driving force for the economy.
The small and middle-sized enterprises (SME) in the private sector have sparked unprecedented economic boom since China adopted the reform and opening-up policy in 1978.
From Huawei to UTStarcom, from Baidu to Alibaba, these players -- not state-owned industrial giants -- are often fighting at the frontier of reform and development. As effective and efficient players in Chinese economy, the SMEs have been offering stable jobs for China's ever-growing labor force.
However, when the financial crisis comes, bank lending often goes more to larger state-owned enterprises instead of the SMEs, and the latter are often the first to go bankrupt. This is unfair, and definitely hinders the healthy development of the economy.
Reforms are already underway, and this problem should be addressed with concrete measures from both the government and the banking system.
Another way to make China's human resources better contribute to the economy should be the development of service industry. Instead of making things, people can do things to make money. More boosts should be given to information technology, telecommunications, medical care and education.
These sectors, rather than traditional factories, will give a platform for China's huge number of college graduates, who get the opportunity of using their education to make money and create wealth for the country.
The lack of talents in key fields such as the financial sector and management also restricts the development of the national economy.
Good practices have been made in larger and state-owned companies. Ever since 2003, China's State-owned Assets Supervision and Administration Commission (SASAC) have started recruiting executives for China's state-owned enterprises (SOEs).
The application was open to top talents worldwide, and some of the SOEs even cancelled limit to the nationality of applicants. From 2003 to 2007, the SASAC hired 91 executives out of 5,985 applicants, 11 of whom had overseas experience.
Other companies should take similar measures. Not only should they introduce management talents, but also hire more experienced financial staff. When the Wall Street is laying off employees, it is high time that Chinese companies bring these talents to China to boost domestic growth.
China needs reforms, in many fields. As a developing country facing varied challenges, China should be prudent in blending long-term economic reforms and short-term stimulus policies.
The two aspects should be carried out in parallel. And one thing should always be born in mind: No policy solves everything.
(Xinhua News Agency April 20, 2009)