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Call for new body to oversee reform

By Fu Jing in Davos | China Daily | Updated: 2013-01-28 07:14
Government should focus more on maintaining growth, economist says

The new leadership should "consider" setting up an institution to oversee reform and redefine the function of government, allowing it to focus more on maintaining growth, a leading economist told China Daily at the World Economic Forum in the Swiss resort of Davos.

"Only through decisive reform and clearly defining the role of government can China overcome difficulties at home," Fan Gang, director of the National Economics Research Institute of the China Reform Foundation, said.

"The new leadership should consider setting up an overarching institution to design the reform timetable and roadmap."

The agenda of China's new leadership has been one of the forum's main talking points.

The new leadership has shown its determination to tackle corruption and is advocating reform, Fan said.

"But the new policy portfolio needs time to take shape, and I think in March, when the new government is formed, more economic and social policies will be unveiled."

Fan said it is crucial to set up an institution to coordinate the reform agenda, which now is mainly implemented through the efforts of National Development and Reform Commission.

China had a ministerial-level institution just under a decade ago to carry out this task. This was under the direct supervision of the government and the premier.

"Currently, the reform institution (a department of the commission) has faced mounting difficulties to coordinate the interests of each ministry. This is mainly due to its diminished authority."

The government should initially reform itself by stepping back from its administrative, pricing and economic role, Fan said.

"Its proper function should be in maintaining smooth growth, offering public goods and social welfare in a market economy," said Fan.

Anil Gupta, professor of strategy and entrepreneurship at the University of Maryland in the US, said the new leadership appears extremely confident, especially Party chief Xi Jinping.

"For example, Xi is very confident, very decisive, and very direct in what he wants to say both outside and inside China. Because of his communication skills, you can tell that he means what he says and says what he means."

But the outside world still wants to know more about China's economic and social agenda and its viewpoint on regional security, Gupta said.

Orit Gadiesh, chairman of Bain & Company, an international business consulting firm, said she expects the new leadership to be open-minded.

"We see China's huge potential and our confidence is based not only on the pace of development but also from the change in attitude over the last decade," said Gadiesh, who is chair of Shanghai Municipality's international advisory body.

Gadiesh said she was among 14 multinational CEOs asked to offer their suggestions to Shanghai.

"We presented our papers and also had a constructive discussion with the mayor," said Gadiesh.

The suggestions were well received, she said.

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