Governance in China
Governance is the next issue to tackle on the development path of the People’s Republic of China. Further adapting institutions and the functioning of the state to an increasingly market-oriented economy is crucial to maintain economic dynamism. Governance reform is also fundamental to address emerging strains related to rising inequalities and environmental deterioration.
During the past two decades, China has taken important steps to reform its state: it has started to adapt its tax system to market mechanisms, designed a budgeting process and laid bases for a modern civil service. But various governance weaknesses still persist, such as fragmentation of authority and co-ordination problems. Corruption continues to be a widespread problem, undermining public action and affecting the efficiency of market allocation. Although China has adopted new sets of regulations close to international standards in various areas such as intellectual property rights, the enforcement of these regulations remains a major issue.
This report goes beyond the general statement that governance matters. It shows how, in practice, governance impacts on public action by looking at different policy sectors, such as agriculture, higher education, labour market and social protection, foreign investment, environment protection, collection of statistics, protection of intellectual property rights, banking and tax collection. The study also takes stock of the progress made in public management and public finance and explores policy options for the future. Further redefining the role of the state, modernising public management, adjusting the relations between levels of government and consolidating the institutional framework for market forces are four directions in which reform efforts should be pursued.
Long abstract
