Date
18 October 2017
China's leaders are expected to unveil new reforms to build on the economic gains of the past. Photo: Bloomberg
China's leaders are expected to unveil new reforms to build on the economic gains of the past. Photo: Bloomberg

WEEKENDER: Hopes build for second wave of China reforms

Billed as China’s second wave of reform, the Chinese Communist Party’s central committee is due to endorse a master plan of reform for the nation for the next ten years at a plenum next week as it seeks to attain the goal of building a moderate well-off society by 2020.

Bearing in mind the landmark third plenary session of the Party’s central committee in 1979 that marked the beginning of China’s modernization journey, expectations have risen that next week’s four-day plenum will go down in history as another milestone event.

Speaking ahead of a Politburo meeting Tuesday that discussed the reform blueprint to be tabled at next week’s plenum, Politburo Standing Committee member Yu Zhengsheng {俞正聲} said: “The width and depth of the next phase of reform will be unprecedented.”

Party General Secretary Xi Jinping {習近平}, who presided over the Politburo meeting, said: “We must adhere to the correct direction of reform and open policy. [We must] dare to bite the bullet, wade into the dangerous beachheads and conduct surgery of the chronic illnesses.

“[We] must not stop our reform and open drive.”

Imbued with an air of crisis, the pro-reform appeals by Xi and his senior aides have reflected the underlying tensions within the ruling party over the scope and pace of the next round of reform.

For their part, both Xi and Li have reckoned the imperatives of taking the risks in embarking on difficult reforms, believing that short-term pain is worth enduring in order to achieve long-term gain.

Understandably, their attempt to dismantle the Great Wall of vested interests built around the fleet of state-owned enterprises, which have made handsome profits from their monopoly powers and practices, has met with resistance.

In fact, with the third plenum of the current 18th central committee being held a later date than usual, compared with previous third plenums, observers have interpreted it as a sign of the fierce debate within the party on the pace and scope of reforms.

Against that background, a masterplan unveiled by the State Council’’s think tank, the State Development Centre, last week has shed some light on the basic thinking and the key areas that will feature in the next phase of reform.

Dubbed as the “383″ blueprint, the first “3″ represents a “three-pronged” reform that aims to facilitate the improvement of a market system, transformation of government functions and innovative enterprise structure.

The think-tank has listed out eight key areas of reform. They are streamlining administrative approvals; breaking monopolies in industries; land reform; financial reform; fiscal and tax reform; revamp of state-owned enterprises; innovative and green development; and opening up the service sector.

It has underlined 3 “breakthroughs” for an overhaul of the eight areas. They are bringing in outside investors to help boost competition; deepening the social security system by setting up a national basic protection package and deepening land reform by allowing transactions of collectively-owned land.

It is still difficult to assess whether and how many recommendations in the “383″ plan will eventually be adopted in the grand plan for the third plenum, which was tabled for discussion at Tuesday’s Politburo meeting. Further changes are expected to be made before the final blueprint is tabled at the Nov 9-12 plenum.

In a landmark development after late patriarch Deng Xiaoping launched reform policy in 1979, the Party’s 14th central committee approved a blueprint for the development of a socialist market economy at its third plenum in 1993. Ten years later, the 16th central committee gave the green light to a set of reforms aimed to “perfect” the socialist market economy at its third plenum in 2003.

More than four decades on, there have been increasingly clear signs that bottlenecks stemming from deficiencies in the country’s political, economic and social structure have hindered its overall developments and, worse, aggravated contradictions and tensions.

Though still obsessed with the imperatives of power and control, the pragmatic-minded Communist Party leaders have accepted the reality that a better balance among government, business and market makes better sense. More important, it stands a better chance to deliver results by devolving powers and loosening control in some areas, particularly in economy and finance.

It is precisely because of the fact that any serious socio-economic reform is bound to have an impact on the decision-making process and political system, doubters and cynics have a reason to be skeptical about the next phase of reform.

Analysts who say the issue of political reform per se will not figure prominently in next week’s reform blueprint will perhaps be proved correct. In recent years, top Communist Party leaders gave no indication of any imminent drastic changes in the political system including democratic elections.

Mainland academics were quoted in the media as saying, however, that a list of initiatives is in the pipeline to advance the political system. They are said to be aimed at improving the executive capability, ensuring proper checks and balances on the power elite, handling recruitment and promotion of officials better, simplifying the administrative regime and eliminating vested interests.

They argue the reform measures will not weaken the power and status of the ruling party, but will in fact strengthen them. Undertaking the reforms, they say, will bolster the party’s leadership and help them stay in power for a long period of time.

Chris Yeung is deputy chief editor of the Hong Kong Economic Journal. This column appears every Friday.

– Contact the writer at [email protected]

RC

 

He was editor-at-large at the South China Morning Post and, more recently, deputy chief editor of the Hong Kong Economic Journal.

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