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Highlights of Caijing Annual Conference--Update Ⅱ

11-29 13:31 Caijing
Day 2 of the Caijing Annual Conference 2013

Chen Xiwen, deputy director of the Office of Central Rural Work Leading Group

It’s necessary to reform the land expropriation system as well as the entire rural land system, said Chen Thursday at the Caijing Annual Conference 2013 in Beijing.

Chen said China’s rural land system doesn’t provide enough guarantee for farmers’ rights and lacks a strong restraining mechanism for use of rural land for non-rural purposes. 
According to China’s current Land Management Law, compensation for 1 mu(0.5 acre) of land expropriated shall not be higher than 60,000 yuan(9,648USD), that is less than 100 yuan(16.08USD) for every square meters.

China passed a draft on land management law Wednesday in which the state council reviewed and amended the nation’s system of land expropriation from farmers.

Details are yet to be disclosed but analysts said the draft is expected to raise the compensation for expropriated land 9 times higher.

Wu Jinglian, one of the principle architects of modern economic reform in China, a prominent economist

The key factor, contributing to the wide gap between the rich and the poor in China, is a rent-seeking bureaucracy, Mr. Wu said on the second day of the Caijing Annual Conference Meeting Thursday.

“There are two kinds among the rich [in China],” Wu said, “ Some have obtained wealth by pocketing rents with their [political] power, which should be firmly resisted.. and severely punished.”

Xu Shanda, former deputy director of China’s State Administration of Taxation

When talking about China’s tax burden, Mr. Xu said that we should not jump to conclusions before figuring out how much the government is taking from the gross domestic product.

The Ministry of Finance has listed three sources of income: fiscal budge, mainly tax revenue; profits from governmental funds, and state-owned assets, according to Mr. Xu. Combined together, it accounts for 31 percent of GDP, he said.

The statistics are incomplete, Mr. Xu added. He reckoned a range between 35-45 percent of GDP would be realistic.

Ma Jun, chief China economist for Deutsche Bank AG

Mr. Ma warned of European-style fiscal crisis without reforms in China.

China's overall explicit debt load is expected to reach 100 percent of gross domestic product at 2050 without reforms, he said.

It would not be an abstraction for the Chinese government being entangled in fiscal crisis just as what happened in the Europe and the United States.

His suggestions on reforms:

--The coming decade is a period of opportunities which can’t be missed out;
--Raise retirement age by an aggregate four year for men and nine years for women during the period from 2015 to 2050;
--Allocate 8 percent of government’s holdings in listed companies to the pension system;
--Funding insurance for long-term household care;
--Develop local government bonds market, or municipal bond market;
--Accelerate the opening-up of capital regime and push the internationalization of renminbi.

Qin Xiao, Council Chairman of the Boyuan Foundation, a Hong Kong-registered non-profit think tank

China lacks the pre-conditions to escape the so-called “middle income trap”, said Mr. Qin.

“China has not shown signs of escaping the middle-income trap, given the status quo of the country’s system and human resources.”

We need to find more balanced and green growth engines to take place the already-failed conventional growth model, he added.

He also warned that a government-dominated market is a hotbed of deals between politicians and businessmen.

Zhu Xiaohuang, Bank of China governor

He said China's shadow loans, based on incomplete statistics, totaled at least 17 trillion yuan.

Among 92 trillion yuan worth of "total social financing", as much as 27 trillion yuan were extended via off-balance sheet vehicles, he said.

"Shadow loans" defined by the governor include trust loans, entrusted loans and private lending.

Tony Blair, the former British prime minister

In his closing speech at the Caijing Annual Conference Thursday, the former British prime minister said the most important issue for a developing country is to create a system based on some kind of value.

He also talked about the euro crisis, saying that the Europeans need to find an effective way to save the euro and to clear up Europe's bank debts.

A longer-term problem is that the Europe, as well as the whole western countries, needs to reform the current system, which came into existence after the World War II ended, he said.


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