CHINA GIVES BROAD REIN TO ECONOMY'S PRIVATE SECTOR. The Washington Post (p.A1) reports that China's announcement that it plans to scrap all obstacles to developing the economy's private sector gives one of its strongest endorsements ever to free enterprise in response to economic problems that the government said demand "urgent solutions."
The announcement, made by State Development Planning Commission Chairman Zeng Peiyan, was a remarkable acknowledgement that China's multibillion-dollar effort to resuscitate its state-run sector has failed. It also indicated that China's leadership has realized that private industry, the most dynamic piece of China's economic puzzle, is a key to the future of the economy, the story says.
The Financial Times (p.18) reports on the boost yesterday to Chinese entrepreneurs through Beijing's most unambiguous endorsement yet of the private sector. The government would actively guide and encourage private investment, the story says a statement by Zeng said.
Private companies will enjoy the same treatment as the state sector, which accounts for more than 70 percent of state bank lending and employs more than 50 percent of the workforce, Zeng said. "We will eliminate all restrictive and discriminatory regulations that are not friendly towards private investment and private economic development in taxes, land use, business start-ups, and import-and-export," he is quoted as saying. The Washington Times (p.A9) also reports.
Meanwhile, China's top economic planner yesterday forecast that the country would this year shrug off a 27-month deflationary spiral that has acted as the main drag on economic growth, reports the Financial Times (p.8). Zeng was also relatively upbeat on China's prospects for GDP growth, saying he was "completely confident" that growth would not fall below 1999's 7.1 percent climb-the lowest level reported since 1990. The Wall Street Journal (p.A19) also reports on Zeng's announcement. Zeng said that China's economy would stabilize this year as the government lifts barriers to private enterprise and boosts investment in the country's impoverished west, according to the story.