Finishing China's economic reform : challenges and pitfalls

We argue that China’s journey towards a market economy is far from being finished. Instead, in many areas, reforms have been delayed and economic problems accumulated. There are six major reforms that have to be accomplished in the near future i n order for the economy to stay on the trajectory of growth. Meanwhile, the current reformers face more and bigger challenges than their predecessors, including ever more vocal losers of reform and increasing difficulties to arrange credible ways to compe nsate them. Facing these challenges, the reformers are prone to falling in two major pitfalls of reform. That is, overwhelmed by short-run issues, they may lose sight of the importance of pushing for fundamental reforms. Also, yielding to the pressure of interest groups, they may choose to implement anti-market and inefficient institutions in the name of “convergence to international practice.”