HONG KONG: In a political system whose lifeblood is opaque slogans, a detailed proposal for China's economic reform ominously titled Plan 383 has created a hubbub of excitement from investors and the country's news media.
China's leaders are moving toward a major policy-setting conference next month bearing heady expectations that they have encouraged.
The proposal from a prominent government research organization has magnified speculation that they will embrace bold pro-market reforms.
The grinding realities of politics, however, are likely to force proponents of such reforms to settle for more modest changes, experts said.
The head of the Chinese Communist Party, Xi Jinping, has repeatedly said a Central Committee conference next month will inaugurate far-reaching economic reforms.
Other senior officials have also encouraged ambitious hopes for the third full gathering, or plenum, of the current Central Committee, a body with just more than 200 central and local officials as full members.
The government has said the meeting will take place in November, but has not given a precise date. "The plenum will mainly be about considering how to comprehensively deepen reform," Yu Zhengsheng, a member of the standing committee, the seven-member innermost circle of party power, said at a meeting over the weekend, according to state media reports.
"This round of reforms will be unprecedented in its broad scope and intensity."
But party leaders have not given details about they have in mind. In the absence of clear explanations from them, investors, diplomats, journalists and less senior officials parse leaders' comments, state media reports and government think tank studies for clues about what changes may be coming.
Plan 383 has attracted most of the attention. It comes from the State Council Development Research Center, which advises senior officials. Chinese newspaper reports have said Liu He, an official who advises Xi and other leaders on economic policy, initiated preparations for the proposal. Liu is also helping oversee preparations for the Central Committee conference.
Here, it seems to some, is a bold plan for pro-market liberalization and limiting government power of the kind that many economists say China needs. Plan 383 lays out three broad ideas for reform, eight specific areas for change and three approaches for coordinating the changes.
"The objective of this new round of reform is to build a socialist market economy that is energetic, innovation-oriented, inclusive and orderly and protected by rule of law," says a summary of the plan.
It was first made public this month, but has generated widespread attention from investors and the Chinese financial media since last week, when the Development Research Center issued it through its own newspaper.
"The reasonable scope of the government's role changes along with changes in the economic stage of growth," the summary says. The policy changes proposed by the report are also strikingly forthright and specific.
The proposed changes include much greater government transparency, reining in monopolies by state-owned companies, encouraging private investment in the energy and power sectors, and land reforms allowing farmers to lease out their land more easily and earn more when their land is taken for commercial development.
Under the plan, China's financial sector would also get a jolt of liberalization."Promote interest-rate liberalization, force financial institutions to raise their competitiveness and capacity for innovation, and lay the foundation for convertibility of the renminbi capital account," it says.
Achieving capital account convertibility would knock away one of the main state controls on transactions using China's renminbi currency, making it easier for money to move in and out of the country. But the public excitement, reflected in intense Chinese media coverage and commentary, must be set against Chinese politics, said several analysts.
China's leaders are likely to adopt a much more cautious and limited program. And in any case, the Central Committee conference next month will probably give only broad outlines of that program, not a definitive blueprint.
Zhang Jianjing, the chief editor of China Reform magazine, which first published the 383 plan, said the proposal offered a window into currents of official thinking, but should not be read as a government blueprint. He said he was surprised by the public excitement about the plan, one of many that researchers have offered to officials.
"My view is that it should not be overread," Zhang said in a telephone interview from Beijing. "In fact, it's one of many studies that have been done. It doesn't represent a draft of the Third Plenum report."
Many of the proposals in the Development Research Center plan and similar ones that have circulated in recent months all involve reining in state control over the arteries of economic life: capital, land, the movement of people, and energy and natural resources.
For China's leaders, dedicated to preserving one-party rule, those are politically contentious choices that they are likely to either shy away from or accept only in diluted form, said Wu Wei, a former government official who was heavily involved in the market reforms that China pursued in the 1980s.
"Without political reforms, it will be impossible to push through these reforms," Wu said by telephone from Beijing.
"The great majority of them will be pushed back by entrenched interests."
Qiu Xiaohua, a Chinese economist who once ran the National Bureau of Statistics, told the China Business News, a Chinese-language newspaper, that investors should cool their excitement with a dose of political realism. "On the one hand, this shows the powerful expectations that the market has for reform," Qiu said.
"But on the other hand, it shows that the market is impulsive and doesn't understand Chinese political realities."
indiatimes.com
China's leaders are moving toward a major policy-setting conference next month bearing heady expectations that they have encouraged.
The proposal from a prominent government research organization has magnified speculation that they will embrace bold pro-market reforms.
The grinding realities of politics, however, are likely to force proponents of such reforms to settle for more modest changes, experts said.
The head of the Chinese Communist Party, Xi Jinping, has repeatedly said a Central Committee conference next month will inaugurate far-reaching economic reforms.
Other senior officials have also encouraged ambitious hopes for the third full gathering, or plenum, of the current Central Committee, a body with just more than 200 central and local officials as full members.
The government has said the meeting will take place in November, but has not given a precise date. "The plenum will mainly be about considering how to comprehensively deepen reform," Yu Zhengsheng, a member of the standing committee, the seven-member innermost circle of party power, said at a meeting over the weekend, according to state media reports.
"This round of reforms will be unprecedented in its broad scope and intensity."
But party leaders have not given details about they have in mind. In the absence of clear explanations from them, investors, diplomats, journalists and less senior officials parse leaders' comments, state media reports and government think tank studies for clues about what changes may be coming.
Plan 383 has attracted most of the attention. It comes from the State Council Development Research Center, which advises senior officials. Chinese newspaper reports have said Liu He, an official who advises Xi and other leaders on economic policy, initiated preparations for the proposal. Liu is also helping oversee preparations for the Central Committee conference.
Here, it seems to some, is a bold plan for pro-market liberalization and limiting government power of the kind that many economists say China needs. Plan 383 lays out three broad ideas for reform, eight specific areas for change and three approaches for coordinating the changes.
"The objective of this new round of reform is to build a socialist market economy that is energetic, innovation-oriented, inclusive and orderly and protected by rule of law," says a summary of the plan.
It was first made public this month, but has generated widespread attention from investors and the Chinese financial media since last week, when the Development Research Center issued it through its own newspaper.
"The reasonable scope of the government's role changes along with changes in the economic stage of growth," the summary says. The policy changes proposed by the report are also strikingly forthright and specific.
The proposed changes include much greater government transparency, reining in monopolies by state-owned companies, encouraging private investment in the energy and power sectors, and land reforms allowing farmers to lease out their land more easily and earn more when their land is taken for commercial development.
Under the plan, China's financial sector would also get a jolt of liberalization."Promote interest-rate liberalization, force financial institutions to raise their competitiveness and capacity for innovation, and lay the foundation for convertibility of the renminbi capital account," it says.
Achieving capital account convertibility would knock away one of the main state controls on transactions using China's renminbi currency, making it easier for money to move in and out of the country. But the public excitement, reflected in intense Chinese media coverage and commentary, must be set against Chinese politics, said several analysts.
China's leaders are likely to adopt a much more cautious and limited program. And in any case, the Central Committee conference next month will probably give only broad outlines of that program, not a definitive blueprint.
Zhang Jianjing, the chief editor of China Reform magazine, which first published the 383 plan, said the proposal offered a window into currents of official thinking, but should not be read as a government blueprint. He said he was surprised by the public excitement about the plan, one of many that researchers have offered to officials.
"My view is that it should not be overread," Zhang said in a telephone interview from Beijing. "In fact, it's one of many studies that have been done. It doesn't represent a draft of the Third Plenum report."
Many of the proposals in the Development Research Center plan and similar ones that have circulated in recent months all involve reining in state control over the arteries of economic life: capital, land, the movement of people, and energy and natural resources.
For China's leaders, dedicated to preserving one-party rule, those are politically contentious choices that they are likely to either shy away from or accept only in diluted form, said Wu Wei, a former government official who was heavily involved in the market reforms that China pursued in the 1980s.
"Without political reforms, it will be impossible to push through these reforms," Wu said by telephone from Beijing.
"The great majority of them will be pushed back by entrenched interests."
Qiu Xiaohua, a Chinese economist who once ran the National Bureau of Statistics, told the China Business News, a Chinese-language newspaper, that investors should cool their excitement with a dose of political realism. "On the one hand, this shows the powerful expectations that the market has for reform," Qiu said.
"But on the other hand, it shows that the market is impulsive and doesn't understand Chinese political realities."
indiatimes.com
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