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Wu Jinglian: Chinese Economy This Year Will Face Difficulties

At the annual conference of Chinese Economists forum 50, Wu Jinglian, a prominent economist and a fellow at the Development Research Center of the State Council, expressed his view that China’s economy in 2014 will face difficulties and that what’s most important is to let the market play a decisive role in allocating resources. Wu believed that the debate around whether real estate is a "pillar industry" is by itself planned economy thinking. If the central bank continues to print money, housing prices will continue to climb. Wu noted that a very important aspect of furthering the reform is to prevent the outbreak of systematic risks. Regarding the local governments, he believes that the transition of their functions involves a lot of personal power and interests. Wu said that China’s economy this year will face difficulties because many problems, accumulated over the decades, need to be sorted out and resolved. For state-owned enterprises (SOE) reform, Wu believes it is important to pay attention to "near-death" enterprises, as a large number of highly indebted SOE’s still rely on subsidies to survive.

Source: Xinhuha, February 11, 2014