ID :
166627
Wed, 03/09/2011 - 00:49
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Shortlink :
https://oananews.org//node/166627
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China's policy shift
(EDITORIAL from the Korea Times on March 9)
Korea has long been confident that its economy is ahead of China???s, not in scale but in sophistication. This may crumble in the not so distant future if the difference in the two countries??? strategic thinking is any guide.
According to China???s new five-year economic blueprint, approved by its two quasi-legislatures Saturday, Beijing is planning to gradually shift from maximum growth to better distribution, or from ``national wealth??? to ``popular wealth,??? in what officials say will mark its second economic reform.
More specifically, the new strategy calls for curbing annual GDP growth to 7 percent from the scorching 11.2 percent in 2006 to 2010 while shifting part of its growth focus from export and large-scale public works to domestic consumption. All this is aimed at increasing the income of low-income brackets and narrowing the wealth gap between cities on the east coast and rural western inland areas.
Few can say for sure whether such attempts at an economic soft landing, reflecting popular grievances on political and economic disparity and foreign pressure for global rebalancing, will succeed.
Yet if these policy changes do not end up as just lip service to prevent the contagion of the Middle East turmoil to the Middle Kingdom and bear some fruits, China will be able to maintain the current state-led capitalist system at least until the Chinese people are no longer be able to suppress their desire for more political freedom despite, or because of, continuous economic development.
What all this means for Korean businesses is clear: Domestic firms should infiltrate the Chinese market rather than use China as their advance base for export, while diversifying export destinations to other markets. As always, private businesses will find a way out independently to weather increasingly fiercer regional competition.
We doubt the same can be said of the government???s policymakers.
Of course there should be fundamental differences between the centrally-planned economy of China and Korea???s free, market-oriented capitalism. Still, it is highly doubtful whether the incumbent Lee Myung-bak administration has any feasible mid- to long-term economic strategy.
If it had one, the people are hardly aware of it, given this administration???s extremely narrow strategic horizon, as shown by its abiding adherence to growth through the artificial cheapening of the currency as well as massive construction projects.
By all appearances, the Lee administration has returned to the 1970s-style economic strategy only without the strong advantages of those days, namely long-term planning and equal opportunity.
China has already overtaken Japan in terms of economic quantity. Given the current situation, we are afraid the world???s No. 2 economy might do the same to Korea in terms of quality.
(END)
Korea has long been confident that its economy is ahead of China???s, not in scale but in sophistication. This may crumble in the not so distant future if the difference in the two countries??? strategic thinking is any guide.
According to China???s new five-year economic blueprint, approved by its two quasi-legislatures Saturday, Beijing is planning to gradually shift from maximum growth to better distribution, or from ``national wealth??? to ``popular wealth,??? in what officials say will mark its second economic reform.
More specifically, the new strategy calls for curbing annual GDP growth to 7 percent from the scorching 11.2 percent in 2006 to 2010 while shifting part of its growth focus from export and large-scale public works to domestic consumption. All this is aimed at increasing the income of low-income brackets and narrowing the wealth gap between cities on the east coast and rural western inland areas.
Few can say for sure whether such attempts at an economic soft landing, reflecting popular grievances on political and economic disparity and foreign pressure for global rebalancing, will succeed.
Yet if these policy changes do not end up as just lip service to prevent the contagion of the Middle East turmoil to the Middle Kingdom and bear some fruits, China will be able to maintain the current state-led capitalist system at least until the Chinese people are no longer be able to suppress their desire for more political freedom despite, or because of, continuous economic development.
What all this means for Korean businesses is clear: Domestic firms should infiltrate the Chinese market rather than use China as their advance base for export, while diversifying export destinations to other markets. As always, private businesses will find a way out independently to weather increasingly fiercer regional competition.
We doubt the same can be said of the government???s policymakers.
Of course there should be fundamental differences between the centrally-planned economy of China and Korea???s free, market-oriented capitalism. Still, it is highly doubtful whether the incumbent Lee Myung-bak administration has any feasible mid- to long-term economic strategy.
If it had one, the people are hardly aware of it, given this administration???s extremely narrow strategic horizon, as shown by its abiding adherence to growth through the artificial cheapening of the currency as well as massive construction projects.
By all appearances, the Lee administration has returned to the 1970s-style economic strategy only without the strong advantages of those days, namely long-term planning and equal opportunity.
China has already overtaken Japan in terms of economic quantity. Given the current situation, we are afraid the world???s No. 2 economy might do the same to Korea in terms of quality.
(END)
