Financial stimulus measures “nearly useless now” says China economist

BEIJING – Veteran economic advisor Wu Jinglian has spoken to an audience at Tsinghua University on the importance of quickened economic reform, blaming what he calls “institutional barriers” as the main factor to blame for a slowdown in China’s overall rise in productivity and a failure to meet the demands of newly-rich middle-class citizens.

Speaking on the eve of a Central Committee plenum which will finalise China’s 13th Five-Year Plan (2016-2020), Wu was quoted by the China Daily as saying the “only solution” is to forge ahead with reform, rather than to introduce continual financial stimulus measures.

In some key areas – including the reform of China’s financial system, prices and pricing system, supervision of the capital market, State-owned Enterprises (SOEs) and further opening up to global investors – efforts to remove institutional barriers have been slower than desired, Wu was quoted as saying.

He said the Government’s fiscal management also has its fair share of issues, contributing this to the substantial debt accumulated from financial stimulus programmes following the 2008 global financial crisis.

At this point, the economist concluded, the effect of financial stimulus measures “has fallen to such an extent as to be nearly useless now”. www.webershandwick.cn (ATI).