Wu Guangqiang

    THIRTY years ago, “reform” was a word barely known to ordinary Chinese. All talk of reform was highly controversial in this ancient country which had been shackled by feudal thinking and ultra-leftist ideology.

    Today, the achievements brought about by reform and opening up have made reform an accepted concept; no one opposes it in principle. Now, disagreement revolves around what reform means and how it should be done.

    My favorite definition of reform is as a correction of abuses. One of the worst and most chronic abuses in our social life, I believe, is a preference for introduction of new measures rather than full execution of them. So doing away with this abuse is reform. And translating plans into action is the most important reform China could make.

    One example is how experts talk about such macro-factors as excess liquidity, overall scale of investment in fixed assets or rise in commodity prices when discussing the problem of inflation. Few pay attention to less theoretical yet more relevant causes, but in reality some fine-tuning to existing policies can be effective.

    For instance, an adjustment to the tax structure can make a lot of difference. Hordes of Chinese shoppers are rushing overseas to shop for luxurious items and daily consumer goods because these items are much cheaper overseas. China’s export-encouraging tax policy is a double-edged sword as it spurs export but inhibits domestic consumption.

    The tax burden is heavy in China’s commodities market. Almost 70 percent of China’s total tax revenue comes from consumption-related levies as opposed to about 2 percent in the United States. Of all the consumption levies, value-added tax is the largest. According to the Ministry of Finance, China’s tax revenues surged 22.6 percent year-on-year to 8.97 trillion yuan (US$1.42 trillion) in 2011. Obviously, with much room for tax structure readjustment, taxes can be cut to bring down inflation and rebalance the economy. Such concrete measures are needed more than empty talk.

    Illegal and arbitrary charges — including fines and excess toll — worsen inflation and cause the cost of logistics to soar. Goods could see their retail price rise 20 to 30 percent higher than is necessary due to tolls and arbitrary charges that are collected during the transportation process. A study on China’s logistics by KPMG shows that the logistic costs, consisting of transport, warehouse storage and distribution, make up 18 percent of the country’s GDP, twice as much as that of the United States.

    Another example is the ineffective supervision and regulation that allow illegal buildings to spring up rapidly.

    According to incomplete statistics, a total of 350,000 blocks of such buildings exist in Shenzhen and the number is constantly rising. On the one hand, the owners are betting on the prospect of legalization of their illegal buildings. On the other, the watchdog seems to have a lax attitude.

    Some may argue that getting rid of the above-mentioned bad practices calls for reform as various interest groups will refuse to give up their vested interests. Yes, further reform is necessary. But it’s a reform that can be achieved with the available resources. A tax readjustment, the removal of some road tollgates and a strict ban on illegal buildings do not require fundamental changes in social structure.

    The question that comes to mind is: if we lack the capacity to fulfill tasks already on paper, what’s the point of advancing new ones? Eugene Delacroix, a painter from the French romantic period, said, “Experience has two things to teach. The first is that we must correct a great deal and the second is that we must not correct too much.”

    (The author is an English tutor and a freelance writer. He can be reached at jw368@163.com.)