Thu, Nov 14, 2013 - Page 15 News List

ANALYSIS: Action to determine fate of China ‘reform’ agenda


The Chinese Communist Party’s latest “reform” message juggles numerous contradictions with suggestions of significant change, but meaningful action will be needed before history can judge it as transformative, analysts say.

Ending a four-day Central Committee meeting, the party released a communique via state media promising to establish a special “leadership group” on change — but while its makeup will be a key indicator of the party’s direction, no details were provided.

The meeting, known as the Third Plenum, is closely watched because the party has used previous gatherings — most notably in 1978, when it embarked on fundamental economic reforms — to signal seismic changes.

Sometimes, mere semantic alterations can indicate such shifts.

As expected, the party went big on generalities, calling for “comprehensively deepening reform” and letting the market “play a decisive role in allocating resources,” compared with previous terminology that often described its part as “basic.”

At the same time, it reiterated the “core role” of the ruling party, as well as dollops of old-style Marxist jargon pushing the role of the state-owned economy.

It set a deadline of 2020, but only for the achievement of “decisive results in the reform of key areas.”

“It looks like on the direction of reform maybe there is strong agreement, but how to push ahead, maybe not,” London-based Capital Economics China economist Wang Qinwei (王秦偉) said.

Wang said the document appeared to exude “a degree of compromise” and included potential obstacles to change.

Kenneth Lieberthal, a China expert and senior fellow at the Brookings Institution in Washington, said that the communique emphasized balance. Assertions were made and then quickly canceled out lines later.

“In that sense it’s kind of like a US president’s State of the Union address,” he said. “Every key constituency gets a sentence and the fact that they don’t really add up is not important because everybody has a sentence they can point to.”

While details were thin throughout the lengthy statement — widely seen as only a summary with a far longer document expected in coming days — some analysts saw promising morsels.

“We can find some useful implications, such as judiciary reforms and some land reforms from the communique, but the communique may not make this Third Plenum a watershed event,” Bank of America Merrill Lynch economists Lu Ting (陸挺) and Zhi Xiaojia wrote in a report.

They dismissed the rhetoric on the role of the market as a “not so meaningful semantic change.”

“For us Chinese native speakers with years of intensive training in Chinese, we found it very difficult to tell the real difference,” they said.

Key omissions, they said, were any mention of reforms to China’s one-child policy or to its hukou residency system, which denies people who have migrated from the countryside to the cities equal access to benefits.

Nevertheless, some saw the document as largely positive, saying it suggested a level of sophistication that is required to move ahead.

Authorities would need to centralize much of the power to make decisions to push forward economic reforms, ANZ bank economists Liu Li-gang (劉利剛) and Zhou Hao (周浩) wrote in a report.

“Practically, they will also give the markets an important role so that all types of resources can be better allocated for greater efficiency,” they added. “This shows that the new leadership does understand China’s political realities and reform challenges.”

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