Mar 27, 2012 11:41 AM

Scholars Weigh in on China's Year Ahead at Lingnan Forum

(Beijing) -- As debate roils on over whether the central government will continue to pursue market-oriented reforms, some scholars made less than conventional proposals at this year's Lingnan Forum. Former chief banking regulator Liu Mingkang made the case for better IPR law in the promotion of growth of China's exports. Meanwhile, other experts called for the wholesale abolition of certain government agencies to open markets.

The annual meeting is hosted by Caixin and the Lingnan College of Sun Yat-sen University, with this year's forum marking the debut.

Held in Guangzhou on March 25, the forum was widely attended by banking and securities regulators and the country's leading economists.

Below is a summary of remarks from the forum:

Scholar Says NDRC Should Be Dissolved

The government needs to stay out of the market and close the country's top economic planner, the National Development and Reform Commission.

A bank-dominated financial system with state-owned insurance companies as major players cannot foster innovation. The government needs to provide a legal framework for the operations of venture capital and private equity firms instead of wrestling for control of them.

Industrial upgrades are occurring at a slow pace because companies have little incentive to reform when production factors such as labor and capital are artificially kept low by the government to maintain high economic growth.

-- Xu Xiaonian, Professor of Economics and Finance at China Europe International Business School

China to Expand VAT Reform

China will expand the scope of value-added tax reforms beyond Shanghai Municipality. The State Administration of Tax estimates that a nationwide application of the pilot rules could lift GDP and export growth by 0.5 and 0.7 percentage points, respectively.

-- Xiao Jie, Director of the State Administration of Tax

CSRC's Next Moves

The securities regulator's work agenda this year includes: 1) Speeding up the creation of a standardized over-the-counter market to serve small-and medium-sized enterprises; 2) Introducing high-yield corporate bonds by June; 3) Deepening securities issuance reforms and strengthening investor protection mechanisms; 4) Pressing ahead with the development in reforming listed companies' dividends system; and 5) Steadily carrying forward efforts to establish a delisting system.

-- Yao Gang, Deputy Chairman of the CSRC

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