An adviser's insights on the road ahead

Chi says he has been impressed by new developments in economics, measures taken to reduce government red tape and the fight against corruption.

Since Li became premier, Chi says, he appears to have hit the road running to implement the leadership's development agenda, and has shown courage and determination that mark him out to become a reforming premier in the years ahead.

Formulating a program of reform is riddled with difficulties, particularly in today's economic environment, Chi says.

In the first half of this year, Chi says, he invested a lot of time and energy in looking into several questions. The first of these were on how the country can reap a further development dividend through deepened reform, and on the need for recalibrating strategies on urbanization, investment and state sector expansion to sustain long-term stable growth and social equality.

Another important matter was a reform action plan he has proposed to the country's leaders, which he completed in June and titled Reforms capable of outpacing crises.

He believes China's economic sustainability has suffered from critical structural problems. Consumption that has been lower than it should be and shortages of resources and energy have long held back growth, and industrial upgrading has been slow, he says, and now the disparity between incomes is growing, fueling social conflict.

Meanwhile, as the government has been preoccupied with economic matters, corruption has become widespread. "Fortunately, the new leadership has responded to these challenges," Chi says.

In his proposals on dealing with such problems, he has listed 30 actions or reform measures for the coming five years. As the Central Committee of the Party has entrusted a special taskforce to draft the country's reform agenda, Chi says his proposals have been used as background reports for the writing team.

"The upcoming reform campaign is pressing and challenging, and the roadmap needs wisdom and foresight."

Reform should focus on sorting out what roles the government and the market should play, coordinating the interests of social groups and fighting corruption, he says.

Very soon China will further reform its pricing mechanism on resources and let the market have more say; market-oriented reforms on interest rates and the exchange rate will be carried out, and in most of the areas in which a monopoly exists, private and foreign investors will be given the same access as state-owned enterprises.

"I think these reforms will be implemented soon after the Third Plenum," Chi says.

Steps will be taken to tackle corruption head on and to reduce government involvement in economic activities and ensure transparent management of governmental organizations, he says.

Government officials should be required to publicly divulge their wealth, he says.

"In that way all power will be exercised in broad daylight. I think that will gradually happen."