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China reform agenda seen under ideological cloud

Posted on: Monday, 6 March 2006, 01:33 CST

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.

Source: REUTERS

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