The report, China 2030: Building a Modern, Harmonious, and Creative High-Income Society, a collaborative work between the World Bank and the Development Research Center (DRC) of the State Council, recommends steps to deal with the risks facing China over the next 20 years, including the risk of a hard landing in the short term, as well as challenges posed by an ageing and shrinking workforce, rising inequality, environmental stresses, and external imbalances.
Six strategic directions for China’s future are laid out specifically:
- Completing the transition to a market economy;
- Accelerating the pace of open innovation;
- Going “green” to transform environmental stresses into green growth as a driver for development;
- Expanding opportunities and services such as health, education and access to jobs for all people;
- Modernizing and strengthening its domestic fiscal system;
- Seeking mutually beneficial relations with the world by connecting China’s structural reforms to the changing international economy.
Some steps are hard to push further, such as the reform and restructure of state-owned enterprises (SOEs) and banks, since such steps could face fierce resistance from bureaucrats who manage or supervise these enterprises. It's not about "what" to do but "how" to get things done. When it comes to "how", it's not easy to find common ground for all parties to resolve some of the most contentious issues - like personnel arrangements. For instance, surrounding the topic of state enterprise reform, neither the World Bank nor DRC has proposed privatization of state enterprises because they both know it's politically infeasible, instead, they argue that SOEs should be overseen by asset management firms and even lay out some specific steps to do so. But, the proposal is still bitterly criticized by the current SOE regulatory agency, the State-owned Assets Supervision and Administrative Commission. Contentious issues were still debated until the last hour of the release of the report.
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