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Economists Call for Deeper Reform

China's political, governmental and institutional reform should be further deepened as the nation moves ever forward with market-oriented system.

High-ranking economists and officials Thursday voiced the call at a forum organized in Beijing to mark the 25th anniversary of China's reform and opening up to the outside world.

They hailed the nation's economic development as a glorious achievement, given the success the country has achieved over the past quarter of a century.

"But today I want to mainly focus on the challenges ahead of the country," said Gao Shangquan, president of the China Society of Economic Reform.

Gao said China should deepen its political reform to make it compatible with its market economy system. "Our current political system, mainly resulting from the planned economic system, needs to be further reformed as China is becoming economically energetic," he said.

Apart from the political change, others in attendance yesterday also pointed out the key economic problems facing China.

They said its economy, which has achieved an average growth rate of 9 percent over the past 25 years, is mainly investment-oriented. But despite all the money pouring in, it is not being used efficiently.

Guo Shuqing, vice-governor of the , said capital investment has accounted for more than 40 percent of the total gross domestic product.

"But the ratio between investment and output is at a very low level, which I'm quite concerned about," said Guo.

His sentiment was shared by Wu Jinglian, China's renowned economist with the Development and Research Center under the State Council.

"In developed countries, investors can gain US$1 of output with US$1 of investment but in China, we need up to US$7 in input to achieve an output of US$1," said Wu. "The investment (in China) is huge but inefficient."

(China Daily October 31, 2003)

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