Chinese Economic Reform - Legacy and Criticism

Legacy and Criticism

The government retains monopolies in several sectors, such as petroleum and banking; the inefficient state banking system has a large number of non-performing loans and loose monetary policy has caused an asset bubble which threatens economic stability. The recent reversal of some reforms have left some observers dubbing 2008 the "...third anniversary of the end of reforms". Nevertheless, observers believe that China's economy can continue growing at rates of 6–8 percent until 2025, though a reduction in state intervention is considered necessary for sustained growth by some.

Despite reducing poverty and increasing China's wealth, Deng's reforms have been criticized by the Chinese New Left for increasing inequality and allowing private entrepreneurs to purchase state assets at reduced prices. These accusations were especially intense during the Lang-Gu dispute, in which New Left academic Larry Lang accused entrepreneur Gu Sujung of usurping state assets, after which Gu was imprisoned. The Hu-Wen Administration has adopted some New Left policies, such as halting privatizations and increasing the state sector's importance in the economy, Keynesian policies that have been criticized by many Chinese economists who advocate a policy of deregulation, tax cuts, and privatization.

Other criticisms focus on the effects of industrialization on public health and the environment. Scholars believe that public health issues are unlikely to become major obstacles to the growth of China’s economy during the coming decades, and studies have shown that air quality and other environmental measures in China are better than those in developed countries, such as the United States and Japan, at the same level of development.