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[财经英语角区] World Bank warns China on growth fears [推广有奖]

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World Bank warns China on growth fears
By Jamil Anderlini in Beijing
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China must urgently implement economic and political reforms if it is to maintain growth of even half the level it managed over the past three decades, the World Bank said in a report released yesterday.

“China has now reached a turning point in its development path,” said Robert Zoellick, World Bank president, in Beijing yesterday. “As China’s leaders know, the country’s current growth model is unsustainable.”
The report warned China faces being ensnared in a “middle-income trap” if it does not address a range of pressing issues, from government interference in the economy to social inequality, weak rule of law and environmental pollution.
After three decades of averaging 10 per cent annual growth, China is the world’s second largest economy and the largest exporter of goods but there is evidence that its export-dependent, investment-led growth model is running out of steam.

The World Bank report forecasts that even if Beijing implements steady reforms and avoids shocks to the economy, annual growth will decline to 5.9 per cent by 2021 and 5 per cent by 2026.
Even at that lower rate, China would still replace the US as the world’s largest economy by 2030 and its influence in the global economy would be comparable to that of the UK in 1870 or the US in 1945.
However, postponing reforms “risks the possibility of an economic crisis in the future”, and raises the likelihood of social unrest, said the report, called China 2030: Building a Modern, Harmonious and Creative High-Income Society.
The research identified reforms to help stave off stagnation or a worse outcome, including strengthening the fiscal system, promoting “green growth”, expanding social security, reducing inequality, fostering innovation and integrating the Chinese financial sector into the global financial system.
In preparing the report, the World Bank partnered with China’s Development Research Center of the State Council. Mr Zoellick said the project enjoyed the “unwavering commitment” of Li Keqiang, the vice-premier, who is expected to take over as premier of China later this year.
“The timing of this report is important because you’ll have a leadership transition in China [later this year],” said Mr Zoellick.
The World Bank hopes its prescriptions will be used as a blueprint for reform but many analysts are sceptical that the next crop of Chinese leaders will have the power or inclination to implement the suggestions.
Probably the most contentious suggestion was the call for Beijing to redefine the government’s role by pushing privatisation of state enterprises and making governance more responsive and inclusive.
Although the word “democracy” did not appear, the report argued for greater political participation by China’s citizens.
“The expanding middle class is increasingly vocal in its demand to participate in the discussion of public policy” and the government should “grant rights to individuals, households, enterprises, communities, academia and other non-governmental organisations through clear rules that encourage broad participation”, said the report.
It also warned that the main obstacle to reform would be opposition from vested interests, such as state enterprises that enjoy a monopoly in markets or companies and individuals with privileges in the current power structure.
The World Bank proposed the establishment of a high-level reform commission to push through the proposals.


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