Though China’s WTO accession will warrant benefits, one should not ignore the fact that to create real capital markets, China will need to undergo political reform. The state must leave the ownership of capital to private individuals who bear ultimate responsibility for the allocation of capital assets and are not subject to political control. That transformation will require major changes in the institutional infrastructure and a new way of thinking about the role of property in a socialist market economy. The fact remains that the future of a true market economy based on private ownership depends on bolder policy initiatives, which will require the willingness of the Chinese Communist Party to share political power and control with other forces.
