Economics high court needed to encourage investors

An economics high court reporting directly to the central government should be set up in Beijing or Shanghai to handle cases related to China's listed securities companies, in order to avoid local government interference and protect the interests of investors, a former adviser to China's central bank said Tuesday.

"We have a lot of capital, entrepreneurs and markets, but no investment. Entrepreneurs are pessimistic because they are deterred by government review procedures for investment projects," Li Daokui, a former adviser to the central bank and professor of economics at Tsinghua University, said at a forum Tuesday in Beijing.

"Government review procedures are not the most efficient and must be reformed," he said.

According to Li, the annual average index growth of stocks is only 1.3 percent in China - far lower than inflation growth - because many listed companies are breaking rules but investors have nowhere to complain.

Local courts favor and protect local listed companies and such a legal system cannot win the confidence of investors, Li said.

To encourage investment and signal economic liberalization amid the slowdown, the State Council, the country's cabinet, announced early this month they will simplify administrative review procedures for investment projects.

"While we expect the government to simplify review procedures, we are more concerned about how to execute those simplifying policies," Yu Fugong, director of the Research Department of Economics at the Party School of the CPC Guangdong Provincial Committee, told the Global Times Tuesday.

"We don't lack concrete rules on paper, but what matters most is how to coordinate functioning government agencies to get these rules implemented," he said.

Meanwhile, speaking at the forum, Li from Tsinghua University said the current economic slowdown is not bringing about as high a level of unemployment as previously, instead providing a buffer for growing pains from economic restructuring.

Citing official data, Li said China added 11 million new jobs during the first nine months of the year, compared with the annual target of 9 million and 10 million in previous years.

"Income is rising, domestic demand is rising and consumption is rising. The economic structure is healthy," Li said.

"We should not worry too much about the current economic slowdown. Proper slowdown is favorable to economic structuring," he said, noting the ratio of consumption to GDP is improving more than expected.