Beijing risks inflicting even more damage to the world economy by reflexively slowing market reforms in response to the financial crisis. But China’s leaders should quicken, not slow, the pace of reform to help it ride through the storm.
This December marks the 30th anniversary of China’s decision to embrace market liberalization but with growth becoming the No.1 concern in China, reforms have taken a back seat.
To stimulate the economy, Beijing has resorted to non-market measures that have worked in the past, such as building big infrastructure projects to boost public spending.
Further, the yuan’s recent slide has prompted some market-watchers to speculate that policymakers are deliberately encouraging the depreciation of the currency to support exports.