World Bank Protest Highlights China Reform Tension

Posted February 28th, 2012 at 3:00 pm (UTC-5)
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Dissension over proposed economic reforms in China burst into the open Tuesday when a lone protester disrupted a press conference by World Bank President Robert Zoellick in Beijing.

Zoellick, who is in China to explain a new report by the bank calling for structural economic reforms in the country, just started talking when Du Jianguo came to the podium and began shouting slogans as he handed out leaflets denouncing the plan as “poison” for China.

“The World Bank calls for China to privatize our state-owned enterprises, they want to partition these big companies. But actually, they are helping the Western companies to get rid of their Chinese competitors. There is no reason for China to privatize its state-owned enterprises, they are doing very well so far.”

Before he was taken away, Du said that World Bank’s policies exacerbate China’s already growing wealth gap. Some of his comments echoed the Occupy Wall Street movement.

Zoellick was unfazed by the interruption. He said the new report — “China 2030” — urges Beijing’s leaders to ask what he described as “tough questions” about how the country’s economy will adapt to the global financial crisis and slowing export demands.

Zoellick said Tuesday that Chinese state enterprises have amassed huge profits as a result of cheap loans from state banks and other preferential treatment. But he said those profits have not necessarily helped the Chinese people.

“So to reduce China’s global savings rate and also benefit the Chinese people, if a lot of those dividends are sent back to provide social benefits for China’s people, you’ll have structural change and help support some of the social security systems.”

The report says the country’s brisk economic growth is unsustainable unless China makes major free-market reforms and recommends that China shift away from its emphasis on exports and encourage more domestic consumption. It says private banks should be allowed to play a larger role, and interest rates should be determined by market forces.

During his trip, Zoellig also visited Guangdong province and Inner Mongolia. This is likely his last trip to China before he steps down as World Bank president in June.