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(China Daily)
Updated: 2008-05-07 07:17

This year marks the 30th anniversary of China's market-oriented economic reforms and opening-up, that has remarkably benefited the country as well as the world.

To build on this long-term growth story, Chinese policymakers must step up efforts to bring more competition into monopolized State sectors.

At a national conference on the reform of economic systems, officials from the National Development and Reform Commission stressed that priorities will be given to reforms of monopoly sectors, in particularly, railways, power and salt industries, this year.

The statement shows that, in spite of fat profits these State sectors have made in recent years, the authorities are keenly aware of the necessity to break the monopoly that some key State-owned enterprises have enjoyed at the cost of consumers.

It is hoped that the government will speed up the reform of monopoly industries by further relaxing controls over market entry, introducing a competitive mechanism and by diversifying investments and ownership patterns of monopoly industries.

During the past three decades, the country has seen its economy grow by more than 9 percent annually. It is expected that the cycle of economic boom would last until at least 2020 to enable the country to build a well-off society.

To this end, the country should steer economic growth to shift away from an excessive dependence on investment and exports to a greater reliance on consumption. But monopoly sectors are standing in the way.

On the one hand, monopoly enterprises like State-owned telecommunication companies have kept the prices of their products or services higher than those in developed countries - much to the disappointment of Chinese consumers.

On the other, monopoly companies in energy and resources sectors have kept down prices of their products with the help of fiscal subsidy in order to encourage energy or resources-intensive investment.

It will not be easy to break the monopoly in these State sectors because of vested interests. However, the transformation of the country's economic growth pattern requires that more market forces be brought into play in these sectors.

Launching a fresh offensive against the burden of monopoly in the national economy is a good way to mark the 30th anniversary of China's reforms and opening-up.

(China Daily 05/07/2008 page8)