Three questions to ask of China’s ‘third plenum’

October 30, 2013

By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Is reform a watchword for China’s new leaders, or just a cliché? The mysterious leadership conclave beginning on Nov. 9, known as the “third plenum”, should give a clue. A similar meeting in 1978 kicked off China’s opening up to foreign trade; at another in 1993 the socialist market economy was born. A senior Communist Party official said on Oct. 27 that this time round, under party chief Xi Jinping, there would be “unprecedented” economic and social reforms. For China-watchers, this raises three questions.

First, what kind of reforms will there be? It depends on what’s politically possible. Adjustments that leave few powerful losers are most likely to make the cut. That should include higher industrial prices for resources like electricity and water, and cutting back of red tape. Savers may get a promise to broaden the options for long-term investment beyond bank deposits and property. Elsewhere, expect mostly rhetoric rather than details. China’s need for tax reform, a proper welfare system and more efficient state-owned enterprises are well known, but face ferocious vested interests.

Second, what kind of power does China’s new president have? Back in 1978, Deng Xiaoping unmistakably emerged from the huddle as China’s de facto paramount leader, able subsequently to push through controversial reforms, like the opening of special economic zones. By contrast, Hu Jintao in 2003 was overshadowed by a space launch, and came over as a cipher rather than a strongman. Xi has so far been somewhere in between. If he steals the show in November, it should mean he has the support to push through bigger changes later.

Finally, what kind of politics does China want? Much about the plenum – even the date - is kept secret until the last minute, because the Party is essentially unaccountable. A change of tone would be a strong positive sign. In his day, Hu tweaked the format by introducing a “work report” that he submitted to his peers for review – a gesture that foreshadowed his focus on consensus. The recent live-blogging of party member Bo Xilai’s corruption trial showed there is room in China’s system for surprising new ideas. If Xi can shake up the process, maybe he can shake up the country too.

 

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