Some Positive Movement, But Major Reform Elusive
Washington, D.C.- Today, the US-China Business Council (USCBC) released its Economic Reform Scorecard report, which tracks developments on tangible progress that the Chinese central government agencies have made toward implementing economic reform and the impact these reforms may have on US companies. The release falls just in advance of the opening of China’s National People’s Congress, which will deliberate economic reform policies and pass a new Five Year Plan for China’s economy.
Overall, China’s reform policies to date continue to have a limited impact on the top concerns of US companies. While “letting the market play a decisive role” remains a fixture of China’s economic reform rhetoric, policy implementation continues to fall short of, or contradict, this goal. Many policies address minor operational issues or are limited to particular sectors, and others do not clearly apply to foreign companies. Although progress has been made in some areas, the breadth, depth, and pace of reform remain uneven.
2016 marks the beginning of the Chinese leadership’s self-identified period for intensifying implementation of reforms. The completion of pilot programs in free trade zones and the launch of the 13th Five Year Plan for economic development, for example, are promoted as ushering in a more ambitious reform program, targeted for completion by 2020. The extent of the Chinese government’s commitment to reforms that will reduce market access barriers and address the level playing field concerns of foreign companies remains to be seen.
USCBC will continue to monitor these issues throughout the year.
· Between mid-August and the end of 2015, Chinese government agencies released several policies that provide positive movement in a few areas. However, systemic issues affecting American and other foreign companies in China remain largely untouched, and the positive steps are offset by other more restrictive moves.
· While China has pledged to bring its currency in line with International Monetary Fund (IMF) rules as the newest addition to the IMF’s basket of reserve currencies, Chinese regulators’ response to recent instability in the financial market raises questions on the direction of its capital and financial market reforms.
· As the year begins, questions about the commitment to reforms that will reduce market access barriers and address level playing flied concerns of foreign companies remain to be answered.
The US-China Business Council (USCBC) is a private, nonpartisan, nonprofit organization of roughly 210 American companies that do business with China. For over four decades, USCBC has provided unmatched information, advisory, advocacy, and program services to its membership. Through its offices in Washington, DC; Beijing; and Shanghai, USCBC is uniquely positioned to serve its members' interests in the United States and China.