China's top securities official: Economic growth slows down but reform speeds up
Whenever economic growth slows down, reform speeds up, and that's the truth in China, one of the country's top securities officials said on Thursday at the 2019 annual meeting of the World Economic Forum (WEF) in Davos, Switzeralnd.
China's economy is slowing down, yet it has enough policies to quash the adverse effect, both on the monetary side and fiscal side. China can generate growth in the short term. Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC) made the remarks at the session of China Economic Outlook subordinate at the annual meeting.
"We have to allocate resources better, to let the resources flow into more productive sectors, but how can you do that? You have to accelerate market-based reform. If you observe the Chinese history of the economic reforms, whenever economic growth slows down, reform speeds up, and that's a truth in China, so you see reform is being sped up now."
"China's economy has short-term challenges, [from the likes of] trade disputes, consumption slowdown, but at the medium- and long-term basis, I mean, three to five years, if you look at that horizon, the Chinese economy should be very healthy and should continue to be a huge growth engine for the world," Fang went on.
Fang held there will be a deal between China and U.S. cover tit-for-tat trade friction in that cooperation is in the mass interest and "when U.S. has some difficulties with the trade negotiations, stock prices began to drop."
Fang also cited the country's freshly-approved plan of a science and technology board in the Shanghai Stock Exchange for China's reform in pace with the times, noting such a move would allow a great number of technology firms to get an early listing at the Chinese stock market, to get financed with equity capital, rather than dead one.
It will allow much earlier listing of technology companies in the Chinese stock market. At this point, any company in China who wants to list needs to have a three-year consecutive profit, and the profit has to reach a certain amount. That prevented a lot of tech companies from getting listed and financed through the public market.
The new board will be a locomotive to the technology enterprises in China, and a boom in the technology sector in the next coming years will supply growth to the economy, said Fang.
In the event U.S. retains its status as an "innovative power" and "regains faith in its own system", there will be no "Thucydides' trap" in terms of China-U.S. ties, Fang commented.