China Boom CMS

<p>In the 1980s we talked about reform a lot, but the only reform we did was rural reform. So, China changed only in the 1990s; the toughest reforms were accomplished in 1990s, and SOE reform was one of them. We always say SOE reform or <i>gaizhi</i>, meaning restructuring, but that&rsquo;s only a euphemism for privatization. It's actually privatization. Between 1995 and 2005, we privatized 90% of SOEs, so now if you go to China, of course, you still see those huge SOEs, but you don&rsquo;t see a lot of small and medium sized SOEs. Most of them have been privatized. So, because of privatization, China changed a lot. I don&rsquo;t think you can still call China a traditional socialist country based on public ownership. The private economy contributes at least two-thirds to China&rsquo;s GDP, and in industry, the contribution of private firms is even higher. People put it at around 80%. So at least China becomes kind of a mixed economy, it&rsquo;s not a pure socialist economy anymore. SOE reform has to be done, I think that&rsquo;s a courageous move, and it was a right move.</p>