China should bring more managing experiences and tech, expert

China’s opening-up policy should not focus only on the introduction of foreign capital. The country should shift its focus by bringing more managing experiences and technologies from outside, and foreign capital that does not help in bringing new managing experiences and technologies should be kept outside China, said Xia Bin, director of the Finance Institute under the State Council Development and Research Center, in an exclusive interview given to a reporter of the People’s Daily overseas edition.

The economist points out that China does not have any shortage of capital at present, as can be seen from the country’s current foreign exchange reserves, deposits, and the investment and consumption structure. When China first implemented the opening-up policy, it proposed that the principle of “two resources (domestic and international resources, two markets”, and the principle of introducing foreign capital, advanced foreign technologies and managing experiences should be adopted. The basic ideas of these principles are still applicable today, although, the detailed contents should be revised somewhat.

He says that at present, China should not stick only to introducing foreign capital; more attention should be paid to the technological and managerial fields. Foreign capital that can help bring in more advanced technologies and managing experiences should be encouraged, while capital not conducive to bringing in advanced technologies and managing experiences should be “kept outside”.

When talking about the specific policies, the economist says that in order to attract more investment, some local governments have offered overly preferential policies to investors to the point sometimes of violating the state policy, and such activities should be immediately curbed now. He says that the central government should encourage local governments at various levels to pay more attention to issues such as energy conservation, environmental protection, land consumption, related industrial policies and proper labor employment, when attracting investment.

He also urges that China should make timely adjustment to its economic development strategy, by shifting the export-oriented economic strategy to one that will boost domestic consumption. This is in line with the country’s development mode as a big economy. In order to do so, China should publicize and implement a set of policies, including a sound fiscal policy, and policies related with social security system, education, health, and those on building a new socialist countryside, so as to expand consumption.