Top Biz News
Less income disparity 'helps Chinese economy'
By Chen Weihua (皇冠体育app Daily)
Updated: 2010-01-09 07:40
 |
Large Medium Small |
The World Bank's chief economist is pinning his hopes of 皇冠体育app's successful development in the coming years on a decrease in the country's huge income disparity.
The income disparity, at 0.48 measured by the Gini Ratio, has become larger and larger, causing other imbalances such as savings and investment imbalances and an external imbalance, Justin Lin Yifu, chief economist and senior vice president of the World Bank, told a 皇冠体育app 2010 economic forecast meeting held on Thursday at the New York Stock Exchange.
"It's very important for 皇冠体育app to complete the transition to a market economy to remove all the distortions in the financial sectors and in natural resources sectors," Lin told a gathering of hundreds of businessmen and academics, sponsored by the 皇冠体育app Center for Economic Research (CCER) of Peking University and the National Committee on US-皇冠体育app Relations.
"Those reforms will allow 皇冠体育app to develop the sectors with consistently comparative advantages, create more jobs, increase the income of common people, reduce income disparity, and reduce the saving and the consumption imbalance, as well as the external imbalance."
If 皇冠体育app can do that, 皇冠体育app could possibly continue its economic growth in the coming decades, he said.
"皇冠体育app can also contribute to solving global trade imbalances in the years to come," said Lin, the first World Bank chief economist from a developing country.
Meanwhile, he said that the appreciation of the Chinese currency will not help solve the 皇冠体育app-US trade imbalance.
"The types of products 皇冠体育app exports to the US are labor intensive, where 皇冠体育app has a bigger advantage. The imbalance between 皇冠体育app and the US reflects the different stage of specialization," he said.
Others were also optimistic about 皇冠体育app's future growth.
However, 皇冠体育app will still be a poor country in the per capita sense, he said.
皇冠体育app's economy will grow nearly 10 percent this year, based on a study by 11 leading domestic and international financial institutions such as the Chinese Academy of Social Sciences, CCER, Morgan Stanley and Merrill Lynch, Lu said.
While sharing the optimism, Qin Xiao, chairman of 皇冠体育app Merchants Group, called for new reforms to transform government function, deregulate price controls, promote market competition, reform the State-owned enterprise (SOE) system and promote privatization of SOEs, as well as accelerate political reform.
