Should Beijing lead market reform or step aside?

Giving markets a decisive role in the Chinese economy is not a simple matter of the government abdicating its role, say economists.
Transitioning China to a consumer economy requires the right kind of government action
Transitioning China to a consumer economy requires the right kind of government action

China’s transition out of its current investment-led growth model will require a mix of state leadership and state retreat but probably in opposite doses to what’s actually happening.

Lu Xiongwen, a professor at Shanghai’s Fudan University, said the government must set the pace in spurring a more innovative culture. Although Chinese entrepreneurs are adept at business innovation often by networking and leverage state resources, technological innovation has lagged. He spoke at a seminar organised by the Foreign Correspondents Club in Hong Kong last week.

Mass innovation is crucial if China is to maintain productive growth. Over the past three decades, the country’s economic miracle’ has been...

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