Following the four-day leadership meeting in Beijing, China’s Communist Party affirmed the market will play a “decisive” role in the economy. Chen Long, professor of finance and associate dean of alumni affairs, held a video interview with The Wall Street Journal to provide his point of view on the Plenum communiqué and the government’s next steps.
Following the four-day leadership meeting in Beijing, China’s Communist Party affirmed the market will play a “decisive” role in the economy. Chen Long, professor of finance and associate dean of alumni affairs, held a video interview with The Wall Street Journal to provide his point of view on the Plenum communiqué and the government’s next steps.
“At this point, the announcement should be taken as a guideline. It’s not particularly surprising that it lacks details – there will be several more important, detailed decisions coming out in the next several days. In addition, the government has set out special leadership groups to execute and plan detailed reforms in order to break reform obstacles,” said Prof. Chen. He specified that financial markets, housing prices, integration of rural and urban areas, and fiscal and taxation reform will be the major areas of reform forthcoming from the government.
When asked about what he views will be the most critical area of reform to ensure sustainable growth, Prof. Chen stated, “What’s crucial is economic reform, and the government realizes this and the market’s ability to allocate asset resources. In particular, we know that China has been fueled by a credit-driven economy, but it wants to transform into a market-driven economy, so it expects the market to play a central role rather than government planning. Whether this can be successful depends on structural reform, but that’s uncertain at this point.”
Please watch the full interview on the Wall Street Journal website.
