Government reform must be continued

China will see a new round of civil servants quitting their jobs, following the Third Plenum of the Communist Party of China’s 18th Central Committee held in Beijing in November. This is good for the market as well as the modernization of the government system, according to an article in China Business News.

Excerpts:

The Chinese term for civil servants quitting their jobs in the government and starting their own businesses is xiahai, ("going into the sea").

In the 1980s, the nation saw the first round of xiahai after Deng Xiaoping initiated market reform. A handful of private enterprises, which have been successful, were set up by former government officials who left their jobs.

Reform of the government system and the market has made starting a private business more appealing and exciting than working in the government, despite the latter’s job stability and welfare benefits.

But the government must be cautious over a trend that could emerge where former officials bring their influence and connections to the market, affecting its operation.

Reform of the central government and the construction of a healthy market must continue. Otherwise, the government system will become a magnet attracting all kinds of talent through privilege and ill-supervised power.

The government’s main job is to serve the public, but not to play a decisive role in allocating market resources.

The government transformation will help rebalance relations between the authorities, society and the market.