Market reforms reshape China's economic landscape

BEIJING - China's market-oriented reforms have reshaped the economic landscape, allowing private companies to compete with and, in some cases outperform, state-owned enterprises.

The latest release by global communications group WPP and Millward Brown offers a glimpse of the shift, which shows the rise of "market-driven" brands and a slowdown among state-owned enterprises.

Listing China's top 100 most valuable brands, the report put internet service company Tencent and online retailer Alibaba in the top two positions, leapfrogging long-time leader China Mobile, which had held the top spot since the ranking was launched in 2011.

Reform initiatives

As pledged in late 2013, China will give the market a "decisive" role in allocating economic resources.

Abolition of registered capital requirements for new firms has caused rapid growth in new company registrations. Tax reduction schemes to replace turnover tax with value added tax has benefitted small and medium-sized enterprises. The opening up of more state-run sectors to private capital has helped increase private-sector involvement in the economy.

In a tone-setting economic conference in December, the country targeted nine areas for focused reform efforts for 2015 - the capital market, market access for private banks, administrative approval process, investment, pricing, monopolies, franchising, government purchasing and outbound investment.

Progress has been made during the past three weeks, but much work is left to be done to broaden these reforms.

Major contributor

Under the government's reform initiatives, the private sector currently generates more than 60 percent of the nation's economic output and more than 90 percent of new jobs each year.

The world's second largest economy grew 7.4 percent in 2014, marking the weakest annual expansion in 24 years. Despite the slowdown, the private sector had stabilized employment as the country managed to create 13.22 million new jobs last year, beating the government's target of 10 million for the year.