【正文】 or markets also need reform. ? Capital markets need to be reformed – they are now dominated by stateowned banks which maintain low interest rates, and do not necessarily allocate capital to the most deserving projects. ? Interest rates need to be more flexible and be used to clear the market versus the current practice of quantity controls. ? Exchange rates also need to be adjusted, partly to reduce the current inflationary pressures and make foreign exchange market more efficient. ? The central bank should be independent. For land, farmers must have more clear entitlement to landuse rights。D is called for. This represents a change from the present where government and state owned enterprises do most Ramp。LESSON 2 China 2030 A Report by the World Bank and the Development Research Center of the State Council of the People’s Republic of China Over the last three decades, China has ? Averaged 10% GDP growth per year ? Lifted over 500 million people out of poverty ? Bee the second largest economy in the world ? Bee the world’s largest manufacturer and exporter ? Bee home to 2 of the top 10 banks in the world, 61 panies on the latest Global Fortune 500 list, the world’s second largest highway work, the world’s 3 longest sea bridges, 6 of the world’s ten largest container ports. But GDP growth is expected to slow from around % now to about 5% in 20262030. This is for several reasons: ? Much of the growth from transferring resources out of agriculture and into industry has already been achieved ? The capitallabor ratio will rise, signaling a smaller contribution to growth of continued capital accumulation ? The old age dependency ratio ( of persons 65/ of persons 1564) will double in the next two decades ? The labor force will start to shrink by 2020 ? Total factor productivity will decline as gains from first