Chinese state media yesterday whipped up expectations for economic reforms from a key Chinese Communist Party meeting, but warned changes would be hard to implement.
Chinese leaders on Saturday began a four-day meeting, known as the Third Plenum, to chart the direction of the world’s second-biggest economy as it faces a slew of challenges from slowing growth to widespread environmental degradation.
Analysts say China remains committed to economic reform, launched more than three decades ago, but the pace slowed under the leadership of former Chinese president Hu Jintao (胡錦濤).
China’s new leaders, President Xi Jinping (習近平) and Premier Li Keqiang (李克強), have in recent days raised expectations for reform, but few details emerged ahead of the secretive meeting.
Economic reforms are on the agenda, officials and state media say, but they have ruled out Western-style political reforms. In a front-page editorial, state-run newspaper the People’s Daily praised China’s economic reforms in bringing prosperity to the world’s most populous country and called for more.
“China needs to deepen reform ... opening up on all fronts to forge ahead,” it said, but added the country faced an “uphill road” as it seeks to address new challenges.
“In a society with rapid transformation and accumulating contradictions, in a fast-changing world with fierce competition, every step we take towards the peak is a perilous climb that bears risk and even crisis,” it said.
Analysts have downplayed concrete measures emerging from the party meeting, which ends tomorrow, as such gatherings tend to unveil general principles rather than concrete policies.
“Expectations that detailed new policies will be unveiled at the upcoming Third Plenum are likely to be disappointed,” research firm Capital Economics said in a recent report.
“But the key gauge of success should instead be whether the leadership presents a coherent and comprehensive plan for economic restructuring,” it said.
The People’s Daily gave a lengthy list for people’s “hopes” for the meeting in a separate article, but gave few details.
Policies could focus on narrowing the wealth gap and shifting rural residents to the cities, it said.
Although decades of rapid economic growth have created new wealth, the gap with rural residents and the urban poor is cause for alarm, analysts say.
China’s Gini coefficient, a measure of inequality with 0 representing total equality and 1 representing total inequality, stood at 0.47 last year, according to official statistics. That is close to the 0.40 level deemed by some Chinese economists to be the “danger” line.
Greater urbanization requires relaxing China’s hukou household registration system which limits social benefits to a person’s original residence, depriving migrant workers of services when they move to find employment. The People’s Daily also dangled the possibility of a “new round” of reforms to powerful state-owned enterprises.
China moved to shut down or merge loss-making state firms in the late 1990s, leaving a smaller number, but with immense power over large sectors of the economy. Analysts say China is unlikely to embark on major reforms or privatization of state firms, though Beijing is seeking to build up the private sector, which could create more competition.
“The meeting will set a comprehensive framework for reforms in the next few years, but will unlikely announce a lot of details,” UBS economist Wang Tao (王濤) said, adding a “major breakthrough” in state enterprise reform was unlikely.