The Economist writes of China's urge to bring its accounting rules in line with international standards. Stultifyingly boring though this might sound to some, the new policy has wide-ranging implications: the article goes so far as to claim that the new rules could help bring about democracy in China. How?
The new accounting rules are meant to properly reflect the value of companies, usually based on market prices. The writer argues that, implemented properly, the new rules would result in greater transparency in the way Chinese companies are owned and managed, which includes proper disclosure of government meddling. In addition, measuring and reporting such newfangled concepts as revenues and profits would also help reflect the "real desires of the Chinese people". And finally, dubious partnerships, cross-ownerships and "sleazy transfers of mispriced assets from the state to the private sector" would be exposed for all to see.
Knowledge is power. Ergo, the new accounting rules, in theory, could help speed Chinese democratisation.
Watch out: the bean counters are picking up their knitting needles.