China Traditionalists and Reformers take heart from CPC Third Plenum

'China Third Plenum announces modern financial system reform agenda'

The party communique contains an aspirational set of objectives but is light on policy detail:-

China Third Plenum announces modern financial system reform agenda

'China will stick to the dominant role of public ownership, playing the leading role of the state-owned economy, while encouraging, supporting and guiding the non-public sector, enhancing its vitality and creativity, it said. 

 

A united and open market system with orderly competition will be built so that the market will play a "decisive" role in allocating resources, according to the communique.

Government functions must be transformed in a manner to build a law-based and service-oriented government.

The reform also includes building a modern fiscal system that supports the initiative of both central and local governments.

China aims to improve a new type of relations between industry and agriculture and between urban and rural areas.

China will lower the investment threshold, step up the development of free trade zones and increase opening-up of inland, coastal and border areas.

Greater importance will be attached to perfecting a democratic system and enriching democratic forms to show the advantages of China's socialist political system.

China will deepen judicial system reform and step up building a socialist judicial system that features justice, high efficiency and authority to uphold the rights and interests of the people.

Power must be supervised by the people and exercised transparently.

China will follow the development path of a socialist culture with Chinese characteristics.

Reforms must be accelerated in the social sector including education, employment, income distribution, social security and public health

The country will establish a state security committee, improving systems and strategies to ensure national security, according to the communique which called for the innovation of systems to effectively prevent and end social disputes and improve public security.

The communique also urged building of a comprehensive system for ecological progress that protects the environment.

Modern armed forces with Chinese characteristics will be built, the communique said.

The CPC will set up a central leading team for "comprehensively deepening reform." It will be in charge of designing reform, arranging and coordinating reform, pushing forward reform and supervising the implementation of plans.'

What does it all mean?

The importance of the One Party State is reaffirmed with ownership continuing to be primarily exercised through State Owned Enterprises.

However references to a more market driven approach hinting at a relaxation of price controls on land, interest rates, and utilities, all indicate a more public commitment to reform. It is perfectly feasible in this enigmatic culture to hold out the prospects of meaningful economic reform whilst reaffirming the role of the party in the governance of the worlds largest social market economy.

In the round China watchers seeking liberalisation will be encouraged. The party does not do 'radical' therefore the announcements of a commitment to further economic reform which is socially inclusive is significant.

Only as we observe policy changes and announcements over the coming months and years will we be able to judge just how far reaching these changes will be. For the moment though traditionalists and reformers will both take heart from  the plenum.

Xi Jingping has restated the political centrality of the Communist Party of China (CPC), affirming it's ideals and standing in Chinese society whilst signposting to the movement that meaningful change will come, but it will be introduced, managed and guided by the CPC.

 

 

Download PDF Copy Article HTML to Clipboard