China can grow as an economy by de-regulation – we have a long way to go
There are two main questions regarding China – what will be the prospect of welfare state and whether China will find something in the middle-income trap. These two questions will explain the development of China for the nearest future
All we need to do is to transfer money to the household sector and to shrink the state sector. That is the transformation.
The central Chinese government owns a big part of the economy. If they need additional cash for the economy, they will transfer the personal savings into the hands of the government. So China has a lot of tools in the box.
Today, China’s reserves are huge: liberalization, openness, deregulation, privatization.
China economy needs very flexible balance between pure market deregulation – liberal mechanism – and some support from more federal and maybe less regional level.
The key driver of the force is not restructuring or adjustment but the dominating role of private sector.
In cooperation with SIBUR