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"If you just try to use brute force, spend your investment in a
few companies that are not really facing a lot of competitive
pressure, those policies, usually they often don't yield much
return for your money," Albert Park told Reuters in his first
trip to Beijing since COVID restrictions were lifted.
The Manila-based lender "consistently" raises with China the
importance of improving the business environment and the
sustainability of the country's development, he said, while
noting that a one percentage increase in growth in China can
increase growth in developing Asia by 0.3%.
The comments come amid growing signs that China's post-COVID
economic recovery is losing steam, intensifying pressure on
policymakers to shore up wobbly growth.
April industrial output, retail sales, and property investment
data this week disappointed investors. Private fixed-asset
investment rose only 0.4% last month, in sharp contrast to the
9.4% jump in investment by state entities, indicating weak
business confidence.
"I feel China does need to move towards really creating a
dynamic private sector with open market competition because
that's how you generate innovation," Park said.
"If you look at the history of China's economic development, a
lot of the gains in growth, productivity, and employment have
come from the non-state sector," he added.
Youth unemployment hit a record high of 20.4% in April.
Park remains optimistic, however, that policymakers will
implement further reforms. Not least, so that China can meet the
accession requirements of the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership, an aim China's commerce
minister reiterated to his Australian counterpart in Beijing
last Friday.
"I think you should take them at their word," Park responded
when asked how China could expect to join the free trade bloc
while appearing to place state-owned enterprises at the centre
of its economic recovery.
"China has always, like many of the countries in Asia, been very
supportive of multilateral open trading systems," he said,
pointing to how China is already a member of the Regional
Comprehensive Economic Partnership.
(Reporting by Joe Cash; Editing by Kim Coghill)
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