"Microsoft Word - China2bandes.doc".pdf

The OECD Economic Survey of China 2005 assesses China's economic growth, which has averaged 9½ per cent over the past two decades, driven by profound shifts in government policies, including the introduction of market prices, private ownership, and foreign direct investment. The survey highlights notable challenges, such as providing a firm framework for private sector activity, maintaining a stable macroeconomic environment, reforming the financial system, and reducing regional inequalities. Key recommendations include further modernisation of the business framework, greater flexibility of the exchange rate, and reforms to the financial sector, including improving governance and increasing private ownership. The survey also suggests that solid public finances could permit tax and expenditure reforms, including less discriminatory taxation and increased expenditure on health and education.