Reformist Premier Li impresses analysts

Small steps have been taken and much more on greater role for markets and yuan convertibility is expectedBeijingSIX months into his new role, China's Premier Li Keqiang has expended vast amounts of energy to convince his audiences at home and abroad how serious he is about reform - and he has been successful at it, say businessmen and economists.迷你倉價錢Citibank senior adviser William Rhodes, who is among those gathered in Dalian for the World Economic Forum, said: "We are seeing tremendous change. A lot has been done."Xue Lan, the dean of the School of Management at Tsinghua University, said: "We can see the determination of the government to reform. Li has emphasised the need to give market forces a greater role. He is taking a new approach."Indeed, reform was the theme of Mr Li's opening address at the three-day forum this week and in an op-ed he wrote for the Financial Times last week.Reform has in fact been a leitmotif for Chinese leaders in the past decade, but this time, analysts and observers say, the world's second largest economy might be ready to take the leap to achieve it.Wang Yiming, the vice-president of the Academy of Microeconomic Research linked to China's planning body, referring to the communist party meeting due in November, said: "We'll know more about concrete reforms after the plenum."Though Mr Li has launched several small reforms, analysts say much more needs to be done to wean China off investment-led growth and to make it a truly competitive, open economy developing through consumption-led growth.China is still over-reliant on investment, despite repeated efforts to reduce credit growth; many sectors of the economy are still controlled by unproductive monopolies which have access to cheap capital and are reluctant to share their piece of the pie with their more competitive, privately-run peers.Li Rongrong, the former chief of the State-owned Assets Supervision and Administration Commission, referring to there being too many government-controlled companies, said: "Of course this needs to be reformed. State-owned en迷你倉最平erprises need to compete to be able to grow."Other themes touched on during the forum have included land pricing reform, taxation reform and reform of the banks and equity markets, which remain underdeveloped for an economy of China's size.Though none of this was new, the general tone of the forum was one of confidence in the rebounding economy and in the capacity of its new leaders to steer it to a more sustainable growth model.Professor Zhang Haibin of the Peking University said: "At present, the new generation of leaders have put an emphasis on the responsibility of local governments. They will be held accountable. This is a big step."Optimism aside, however, the panellists at the forum warned that change will not be easy, given that the Chinese economy is so entrenched in its bad habits; reforms will thus have to be introduced gradually.Helmut Schutte, vice-president of the China-Europe International Business School, said: "China would be very ill-advised to call for a 'Big Bang'. It will have to take progressive steps."The most noted overhangs on the economy remain the country's non-performing loans, a leftover of the 2008 stimulus, and the "shadow banking" system. A report on the state of non-performing loans of Chinese banks is due out at the end of the month.Citibank's Mr Rhodes said: "The whole question of credit growth has to be taken into account. The question is 'What sort of control can be put in place to avoid a repeat of the bailout of the banking system 10 years ago?' It's important to continue to open up and reform the market, but this must be done in a coordinated way."Mr Li used the forum as a platform to expand on his plans for the overhaul of the financial sector and the economy in general. He mentioned full convertibility of the yuan, the opening up of the financial sector to more private companies as well as market-based interest rates.He gave no timetable, but some observers expect China to liberalise its currency as soon as in 2015.Mr Li had said: "China's modernisation will not be accomplished without reform."迷你倉