State monopolies tenacious barrier to reform
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Meanwhile, China's much-criticized domestic monopolies need to be cracked open. According to the 2008 data, some 60 percent of the total amount of salaries paid in China is earned by a mere 8 percent of staff, who work in petrol, electricity, telecoms, tobacco and other State-run monopolies.
The insufficiency of domestic free competition that results from these monopolies is a crucial factor that impedes China's economic development, and is also the main cause of the country's failure to expand its domestic demand.
The principle of diminishing returns in economic law states that the more a person earns, the less economic value his or her increased wealth holds. So the distorted salaries paid to staff in State monopolies means they make a smaller contribution to the social economy.
Breaking these monopolies and opening up the employment market in the related fields is necessary not only for social justice but also for economic growth.
Currently, the most urgent economic problem in China is that ordinary people are finding it difficult to increase their incomes. The reason is that a still-closed society protects monopolies but fails to provide fair employment opportunities for ordinary workers and farmers.
Breaking these monopolies and opening up the market to the whole country will help a great number of ordinary people increase their incomes, create more economic value and enlarge domestic demand.
In future, the largest and fastest-increasing market will be in China, and China's biggest source of demand will lie in ordinary people, especially when the vast numbers of farmers are better integrated into the economy.
Therefore, while still insisting on reform and opening-up, we should look to reform outside and open up inside. These two goals can reinforce each other to create a fairer China and a fairer world.
The author is a Bejing-based public servant. forum@globaltimes.com.cn
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