Protester Takes Aim at Zoellick, Chinese Economic Reform Plan

Posted February 28th, 2012 at 1:05 am (UTC-5)
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Dissension over proposed economic reforms in China burst into the open Tuesday when an angry demonstrator disrupted a press conference by World Bank President Robert Zoellick.

Zoellick is in Beijing for the release of a major study by the bank and Chinese government experts that calls for China to scale back the role of its powerful state-owned enterprises.

But just as Zoellick began to speak, a man in a business suit jumped up and began shouting 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.”

The man, who gave his name as Du Jianguo, argued that the plan would simply weaken Chinese companies to the benefit of their Western competitors. Before being hustled out of the room, he said the plan would turn Chinese banks into “cheaters and parasites” like American banks.

Zoellick was unfazed by the interruption, saying he will look at the pamphlets but noting he has encountered numerous protests during a career in which he dealt with highly controversial trade agreements.

“Frankly, this isn’t new to me and my work over the public service for the past 30 years. I was a trade representative so I dealt with demonstrations and worse.”

Zoellick stressed Monday that the report has the full support of China’s top leaders, including President Hu Jintao and his likely successor, Vice President Xi Jinping. However, some Chinese believe the state enterprises have been instrumental in China’s rapid economic growth and its ability to compete with Western corporations.

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 also 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.