China reform agenda seen under ideological cloud

By Chris Buckley

BEIJING (Reuters) – China’s economic progress is being
threatened by ideological rifts and bureaucratic profiteering,
a senior official economist said, as China’s parliament began
discussing a national development plan.

Members of the government-vetted National People’s Congress
on Monday mostly extolled the blueprint for continued economic
growth while spreading more wealth to the country’s poor that
Premier Wen Jiabao presented at the opening session on Sunday.

But Wu Jinglian, an influential economist who sits on an
advisory council that meets alongside the parliament, said
China faces deep problems not fathomed by official plans — and
solving them is stalled by official self-interest and
contention between pro-market reformers and resurgent leftists.

“The visible foot is treading on the invisible hand,” he
told Reuters, speaking of official control of market deals.

“At issue is whether we want a true market economy or
bureaucratic capitalism, and under these complex conditions,
pushing reform forward has become extremely difficult,” he
added.

Wu, 76, is chief economist at the State Council Development
Research Center, a high-level government think-tank; he has
regularly advised China’s leaders and helped draft the new
five-year national development plan.

His bold comments were part of a rising debate about the
direction of China’s economic reforms that has spilled over
into the current parliamentary session.

On Sunday, Premier Wen presented plans to raise government
spending in the countryside and improve the welfare of farmers.
He promised to protect farmers’ rights, but did not mention
land reform, an issue his key adviser on agriculture recently
broached.

“We must respect farmers’ wishes and avoid formalism and
coercive orders,” Wen said.

UNREST

China has seen rising rural unrest in recent years, often
sparked by officials requisitioning farmland and then selling
it for commercial development with nearly all the profits going
to themselves.

In 2005, China saw 87,000 protests, demonstrations and
other “mass incidents,” according to official estimates — many
sparked by rural land disputes.

Wu and other legislators and advisers said fundamental
reform, including independent rule of law, is needed to defuse
popular discontent. Farmers must gain clear private control of
farmland, which now rests in “collective ownership” —
effectively official ownership, Wu said.

“Government officials’ exploiting public power for private
gain has become an extremely serious problem because they have
a new resource — land taken from farmers,” he said.

“Farmers should have perpetual land usage rights, and they
should be the ones that profit from that right, not government
officials.”

Wu said rising public distrust of the market — fueled by
the resurgent influence of old-guard Marxists in the state-run
media — has also thwarted momentum to further reform China’s
state-owned businesses.

Other members of the Chinese People’s Political
Consultative Conference, an advisory body that meets at the
same time as China’s parliament, criticized market reforms in
their speeches, blaming them for rising corruption, inequality
and unrest, Wu said.

“The old left is exploiting these things…to lead the
public down an anti-reform path,” he said.

But China’s rising wealth could not be guaranteed unless it
was backed by clear boundaries on state power, he added.

“If we don’t establish fair rule of law and don’t have
clear protection of property rights then this market economy
will become chaotic and corrupt and inefficient,” he said.