After 'Black Monday' - Time to take stock
- By Heiko Khoo
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E-mail China.org.cn, August 26, 2015
However, despite the vigorous campaign against corruption initiated by President Xi Jinping, there is still a trend for wealthy individuals to park their money in real estate and shares. Unfortunately, this money is often the fruit of ill-gotten gains and distorts both markets. In addition, surveys have repeatedly shown that more than half of China's dollar millionaires plan to emigrate. Obviously, they want to filter their cash out of the country. Although China has one of the highest home ownership rates in the world, speculative property investment plays far too big a role in China's property market. One easy method to deal with this would be the enforced requisition of idle second properties combined with rent control, which can help to meet the low-cost housing objectives of the government.
Nevertheless, the reality is that China's stock markets do not drive the economy. The misinterpretation of economic appearances in China is rooted in false assumptions about the basic structure of its political economy. State ownership remains dominant in China's stock market. And the 13th Five Year Plan (2016-20) will be the main guiding force in the economy, just as the 12th Five Year Plan determined the shape of China's development between 2011-2015.
China's growth will continue to be mainly driven by investment in the infrastructure of urbanization and technical upgrading. The rapid rollout of improved social security, welfare and housing for all urban residents - new and old is designed to lay the basis for a harmonious society. This will require big improvements in the living standards of the working class and a more egalitarian structure of wealth distribution, which, in turn, will feed further big increases in the consumption power of the masses.
Although China's modern planning process is broad and engages multiple agencies and organizations in its development and in checks and balances, the urban workforce and population are only marginally involved in this process. In this respect the trade unions and workers' congresses are the key institutional agencies that should express the knowledge and initiative of the masses - through participatory and democratic planning. It is true that decision-making that really engages the masses is initially slightly more cumbersome than small groups making the decisions. But mass democratic planning will be more organic, and more capable of minimizing bureaucratic mistakes and checking the misuse of power at all levels.
Heiko Khoo is a columnist with China.org.cn. For more information please visit:http://china.org.cn/opinion/heikokhoo.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn
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