Meeting the economic challenges of the year

An employee counts yuan banknotes at a bank in Huaibei, Anhui province June 22, 2010.[Photo/Agencies]

The Chinese authorities need to address three fundamental economic and governance issues this year.

First, given the mismatch between its strategic deployment and tactical design, it has to restructure the economy, and devise innovative strategies for the Belt and Road Initiative and the Asian Infrastructure Investment Bank, which will have long-term effects among others, on society, politics, governance and national defense.

Yet having a top-level tactical design is only the beginning, especially because China still lacks complementary practical plans to implement its strategies. Tactics should be flexible, so that they can be adjusted according to circumstances and can achieve the strategic goals.

Many parties such as industrial enterprises, financial companies and governments at various levels have adopted a wait-and-see attitude toward the Belt and Road Initiative. The huge number of files, research projects, meetings and seminars on the initiative have yielded few valuable action plans making the initiative look more like a movement than a strategy.

Also, many tactical departments are slow or reluctant to act when it comes to making implementable action plans; they talk about opportunities and gains but seldom mention the challenges, risks and losses.

Second, short-term policies will not generate truly innovative enterprises. Although China has not shown any signs of a systemic economic crisis, it still faces a progressive decline in the marginal effects of its monetary and fiscal policies, external and internal economic pressures, and a slowing economy.

Urging people to start new businesses and encouraging them to pursue innovation by, for example, making good use of the Internet may be aimed at stimulating market vitality. But that it is easy to register a new business does not mean it is also easy to make it a success. Therefore, the authorities should ensure their policies to promote entrepreneurship and innovation are targeted at the right people and industries.