Analysis: China heads back to the '90s in economic reform drive

China is poised to launch its most serious economic reform drive since the 1990s after a series of top appointments at the weekend put the architects of Zhu Rongji's (朱镕基) clash with state owned enterprises in charge of key economic agencies.

Vice Premier Ma Kai(马凯), Finance Minister Lou Jiwei(楼继伟) and central bank governor Zhou Xiaochuan (周小川) were all Zhu lieutenants at the State Commission for Restructuring the Economy, which drew up the blueprint to sever the army's ties with business and make millions jobless as state-owned enterprises (SOEs) were reformed.

From left to right, Vice Premier Ma Kai,  central bank governor Zhou Xiaochuan, Finance Minister Lou Jiwei. Photo: Sino-US.com

They headline a clutch of officials in Premier Li Keqiang's new line-up, who are broadly considered pro-business economic reformers able to finish the work started by arch-reformer Zhu when he was premier in a way that meets the different economic conditions of today.

"China is about to bring on the structural reforms that will ultimately reduce the old SOEs to ashes," Paul Markowski, President of New York-based MES Advisers and a long-time adviser to China's financial authorities, told Reuters.

"This is changing the economic policy team in a way that would be akin to bringing back the Clinton economic team to run President Obama's economic initiatives," said Markowski, who met with senior officials - including those at the central bank and the powerful planning agency the National Development and Reform Commission (NDRC) - during China's annual parliamentary meeting this month.

Zhu was credited with getting China into the World Trade Organisation in a move that required shutting thousands of inefficient businesses and ultimately set the nation's exporters on course to become the world's most prolific, driving the economy to No.2 spot behind the United States in the process.


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