Sat, Nov 23, 2013 - Page 8 News List

Economic reforms from third plenary session

By Tung Chen-yuan 童振源

In terms of opening up, the CCP wants interaction and mutual stimulation between domestic and international deregulation, and orderly and free exchanges between international and domestic markets, hoping to use this international opening up to promote domestic reform. Specifically, China wants to lower the entry barrier for investment, speed up the establishment of free-trade zones and expand the opening up of the hinterland and border areas. China is clearly striving for more comprehensive liberalization and opening up, including international circulation and domestic deregulation of production factors. The free-trade zone in Shanghai is an important testing ground for the CCP if future deregulation is going to be even more comprehensive.

Social protest has continued in China in recent years and the funds spent on maintaining social order have surpassed the nation’s defense budget. Over the past month, both Beijing and Shanxi have experienced bombings, a clear sign that social order is deteriorating and protests are intensifying.

The third plenary session also called for the establishment of a national security council to compile information and resources relevant to maintaining order from the different ministries so the council could learn from them about non-traditional security challenges such as from food, energy and finance challenges. The council can also integrate the policies of 19 CCP leadership groups to create an overall national security strategy and respond to major crises.

After 34 years of rapid development, China’s economy is facing unprecedented challenges as it seeks to adjust its economic growth model. It can no longer rely on growth through investment and exports, but must change tack and focus on growth driven by domestic demand and consumption. At the Central Committee meeting, the CCP tried to respond to this challenge with its plans for marketization, urbanization, liberalization and globalization, and to establish a major reform goal that should be met within seven years. Whether China will succeed in these reforms will depend on the determination and ability of Chinese President Xi Jinping (習近平) and the premier. The world waits in anticipation.

Tung Chen-yuan is a distinguished professor in the Graduate Institute of Development Studies at National Chengchi University.

Translated by Perry Svensson

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