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UPDATED: September 28, 2014 NO. 40 OCTOBER 2, 2014
A New Start for Change
After 65 years of development, China has ignited a new round of reforms to create an even brighter future
By Li Li

CARING FOR THE LEFT BEHIND: On July 18, a college student teaches an art class in a village of Pingdingshan, Henan Province, for rural students who stay at home while their parents seek opportunities in the cities (XINHUA)

The 'new normal' mode

"The Chinese economy is transitioning from a stage of high-speed growth to a stage of medium-high-speed growth. In order to step into the new growth routine smoothly and quickly, it is crucial for the government to reduce risks by deepening reforms so as to achieve improved quality of the economy during the next stage," said Liu Shijin, Deputy Director of the Development Research Center of the State Council.

During his inspection of central China's Henan Province in May, Xi said that China's economic growth must adjust itself to the requirements of a "new normal" phase.

The relatively weak economic data since the beginning of this year were seen to be the background for Xi's remarks. In August, China's industrial output grew at its slowest pace since December 2008. Electricity production, automobile and property sales and foreign direct investment have all been weaker than expected.

However, more than 9.7 million urban jobs were created during the first eight months of 2014, over 100,000 more compared with the same period last year. In the aforementioned timeframe, the total number of newly registered market entities was more than 8 million. From March to August, in the wake of the business registration reform, the number of new businesses grew by 61 percent over the same period of the previous year, all pointing to a massive upsurge which has generated more than 10 million jobs.

During the first half of 2014, average disposable resident income rose 10.8 percent year on year to 10,025 yuan ($1,627) and the inflation-adjusted growth rate stood at 8.3 percent. The income gap between urban and rural residents narrowed, with actual income growth in rural China 2.7 percentage points higher than that in urban areas in the January-June period.

A series of commentaries on "China's economy in the 'new normal'" appeared on the first page of People's Daily on August 5, 6 and 7, respectively. They said that the seemingly indomitable economic growth China experienced in the three decades since 1978 is no longer feasible, sustainable or necessary; the "new normal" China is less interested in growth rates and more interested in quality and efficiency of growth: pushing forward reform, adjusting structure and improving people's lives.

Greater potential

The Chinese Government has also pressed ahead with management reforms by scrapping or decentralizing administrative approval rights in an effort to improve efficiency and stem corruption.

Li Zhangze, spokesman for the group spearheading the reforms under the State Council, said on September 10 that a total of 632 administrative approval items had been either dismissed or relegated to governments at lower levels. The Central Government aims to scrap and decentralize a further 200 administrative approval items within the year.

"Through these efforts, the government has achieved important progress in simplifying administrative procedures and bringing about changes to management," he said.

Addressing the Summer Davos Forum in Tianjin on September 10, Chinese Premier Li Keqiang said that instead of adopting strong economic stimulus or easing monetary policy, the Chinese Government has promoted reform and economic readjustment to maintain steady economic performance.

"China's reform and opening-up for the past three-plus decades and beyond has in itself represented a huge innovation drive, and the huge, untapped potential of innovation and development in the future still lies in institutional reform," said Li.

Cheng Zhenfeng, CEO of a Shanghai-based startup producing a coating that protects against the corrosion of pipes or vessels under insulation, is confident about the future. Owing to the reform of lowering registration hurdles and simplifying registration procedures for small businesses, Cheng's company, registered with subscribed capital of 3 million yuan ($487,000), was able to open to business much earlier than he had expected. Within three months, the company had incorporated advanced technologies from Germany into the mix and signed orders with several vessel manufacturers.

"The reforms have opened the fast track for private companies to enter the market," Cheng told Xinhua News Agency.

A fairer society

On different occasions, Xi has stressed that the reform would be meaningless without creating a fair social environment, which could even engender more inequalities. He said that while creating more social wealth is paramount, it is equally important to ensure improvements in people's welfare.

Premier Li also stressed recently that carrying out reforms should primarily ensure fairness by giving job seekers equal opportunities, entrepreneurs a fair environment for competition and children equal access to quality education.

As part of "the most comprehensive" reform since China resumed the national college entrance examination in 1977, a new measure requires first-class universities to allocate a certain enrollment quota for students from poor, remote and ethnic minority regions. The new policy saw enrollment rates from rural areas grow by 11.4 percent year on year in 2014, with roughly 50,000 students from across 832 impoverished counties in 22 provinces gaining entrance to top universities.

By the end of 2011, China's basic health insurance system had covered 1.3 billion people, or 95 percent of the population. The per-capita government subsidy for residents covered by this system has also increased steadily over the years.

Email us at: lili@bjreview.com

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