Wall Street History

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Wall Street History

11/29/2013

China's Reform Agenda

China is the world’s second largest economy, though its gross national income per capita ranks 90th, according to the World Bank. The Communist Party recently held a key meeting to lay out a growth and reform agenda. So following is some of the Chinese take on it.

Editorial / Global Times [a Chinese government mouthpiece]

“The Third Plenary Session of the 18th CPC Central Committee approved a decision on ‘major issues concerning comprehensively deepening reform.’ The document is widely taken as having set the course for China’s future reform.

“This Third Plenary Session is as historically significant as the Third Plenary Session of the 11th CPC Central Committee in 1978. [Ed. The time of Deng Xiaoping.] It summed up China’s reform in the past 35 years and responded to expectations of society. Although the meetings were closed-door, public participation was unprecedented thanks to the Internet era.

“The document expresses the common desire of the whole society. Based on a communique issued after the session, it is the joint decisions made by CPC and the Chinese people facing up to the daunting challenges. Some questioned whether the central government would be determined to ‘gnaw at a hard bone’ while advancing reform before the Third Plenary Session. The public now should shift their attention to how to put the framework into practice....

“With the advancing of reform, we should firmly oppose vested interest groups. [Ed. the power of mammoth state-owned entities.] The authority of the central government on coordinating reform should be supported. In present-day society, interests have become pluralistic – if we don’t seek a consolidation of group interests and whole social interests, reform will be an empty slogan....

“Past 35 years of successful reform have brought profound changes to China and benefited the whole people. That’s why reform has won universal support. We encountered ups and downs in the first decade of reform, and even though we have accumulated abundant experiences so far, there are many uncertainties ahead to be dealt with. Reform is not only a test for the leadership but for the rationality and maturity of society....

“The Third Plenary Session offers a good top-level design to instruct reform but it needs cooperation from local officials and the grass-roots. Some local officials lack the courage to take the risks of reform or the wisdom and abilities to innovate. This should be faced up to when implementing the framework nationwide.”

1. One-child policy eased – allowing couples to have two children if one of the parents is an only child.

2. Anti-corruption measures – providing housing to officials while forbidding them from occupying other properties; restricting the number of government institutions and the number of government posts.

3. Constructing a legal counselor system – ensuring the authority of the constitution.

4. Gradually removing the administrative ranks of schools, research institutes and hospitals.

5. Hukou system reform – allowing more farmers to become urban residents while strictly controlling the population of large cities.

6. Researching plans to gradually extend the retirement age.

7. Easing burdens on ecologically fragile areas – stop pressing local government in ecologically fragile areas to pursue economic development.

8. Scale of land acquisition decreased – land acquisition must follow procedure.

One of the drafters of the policy blueprint said it represents a break from the past 20 years because it emphasizes the need to use markets to limit government’s role in the economy. Yang Weimin, deputy director of an economic committee that advises top party leaders, told the People’s Daily that the lack of reliance on markets produced many of China’s current problems.

“The core issue is the government directly allocates too many resources and there’s too much unreasonable interference. Overcapacity, the urban disease, too much occupation of farm land, local debt risks, environmental destruction are all connected to excessive government interference to a very great degree,” Yang was quoted as saying.

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