Wednesday, November 13, 2013

China - New Directions for Economic Reforms

Last UPDATE on November 15:

Yesterday, November 12, Linda Yueh, the chief business correspondent of BBC, delivered her report on China's Mysterious Third Plenum that should have been summoned for a rather short session compared to the importance of decisions expected to be taken. Here is an excerpt from that report:

Among the few phrases in the short communique, the key ones are "comprehensively deepening reform" and "crossing the river by feeling stones".

The reference to "comprehensive" reforms fits with the billing in the Chinese state media that this meeting of the top Chinese Communist Party officials will result in significant reforms under the new president and premier during their decade in power.

The details of their economic policies are scant from the communique. In the coming weeks and months, the official media may divulge more at the whim of the Chinese leaders.

So far, allowing the market to play a "decisive" role in the economy has emerged as a message in the state media.


But, the invocation of the phrase, "crossing the river by feeling stones" is a deliberate echo of the 1978 Third Plenum which ushered in the reform era.

The story goes that the phrase is attributed to Deng Xiaoping. When he was asked how he planned to introduce market forces into the centrally planned economy and achieve his reform aims under such difficult circumstances, he reportedly said that it's by "crossing the river by feeling stones".

In other words, step by step in a pragmatic manner is how big reforms are ultimately achieved in China.

It's worth bearing in mind that China's economic reforms under Mr Deng were considered gradual and not radical. It's in contrast to the radical dismantling of the command economy that much of the former Soviet Union undertook.

But, in retrospect, the 1978 reforms were transformative.

By invoking the spirit of Mr Deng's reforms, President Xi Jinping and Premier Li Keqiang are perhaps signalling that, in time, their multi-pronged reforms will be similarly transformative as China faces the next era of growth.

But, for now, we are likely to mostly hear disappointment over the lack of transparency of the economic policies of the world's second biggest economy which has implications for the rest of the world.

To shed some further light on what has just happened in China, here are some data about that mysterious third plenum and which have been quoted from a Chinese source:

十八届三中全会公报:创新社会治理 设立国安委

Bulletin on the Third Plenary Session of the 18th Central Committee:
Bringing forth new ideas to administer society; setting up a committee for national safety.


From November 9-12 the Third Plenary Session of the 18th Central Committee of China's Communist Party was held in Beijing.

出席这次全会的有,中央委员204人,候补中央委员169人。中央纪律检查委员会常务委员会委员和有关方面负责同志列席了会议。党的十八大代表中部分基层同志和 专家学者也列席了会议。

Attending that plenary meeting were 204 members of the Central Committee and 169 candidates of the Central Committee. Members of the standing committee of the Central Commission for Inspecting Discipline and comrades in charge of related aspects attended the meeting [as nonvoting delegates]. Among the delegates of the 18th [greater Central Committee] a part of comrades came from the grass-roots level, and specialized scholars were attending the conference as well [as nonvoting delegates].

[Source: Xin Hua Network 新华网 on November 13, 2013]

Chinese media praising the Third Plenary Session.


A noble entity: The Third Plenary Session is opening a new starting point for strategical reforms.

The article quoted above with its headline is referring to similar Third Plenary Sessions of former Central Committees, namely those in 1984, 1993 and 2003, when important changes were brought on their way on such meetings. Chinese numerology, regarding the number three as one of two basic numbers (3 and 5) being related to luck, might have played a decisive role in choosing a third plenary session for dealing with most important subjects. There are lots of other Chinese examples fitting in with such estimation.

[Source: People's Network - Chinese Communist Party News 人民网—中国共产党新闻 on November 14, 2013]

三十五年的改革之路——中国锐改 泽被世界

35 Years on the Road to Reform - China's Vigorous Change - The World's Favourite.

[Source: Sou Fun Network 搜房网 quoting a regional report, November 13, 2013. Lots of articles like that could be found on that day, emerging one after the other in related search engine results.]


UPDATE for November 15:


The Central Committee's [united front] circulates [information] to such personnel not belonging to the Party on [the vital results] of the Third Plenum of the 18th Central Committee of China's Communist [Party].

[Source: China News Network 中新网 on November 14, 2013]

The following text is an evaluation of Xi Jin Ping's proceedings since he took over the post of a secretary general of China's Communist Party:

中共十八大后一年:铁腕纠四风 反腐动真格

In the year following the 18th [greater Central Committe's meeting]:
Correcting the "Four Styles" with an iron hand - Truly opposing rotten action.

What is meant by the so-called four styles are four different ways to approach things in daily work. This could imply there's only one efficient procedure to be followed under the guidance of the party. On the other hand, rotten action should refer to nasty habits like corruption and which has to be "truly" eradicated.
The following excerpt from the body of the same text quoted above with its headline is showing that China's Communist Party is willing to use all its autocratic power and influence to carry out reforms. The expression "managing the tiger and the fly" most probably means an equal treatment of the influential and the weak, of big and small-scale business.
However, all language used in this article is a mixture of the Party's typical vocabulary, used together with cryptic abbreviations or typical Chinese proverbs. This is what makes such kind of text so difficult to understand for any foreigner. If real news on definite reforms are hidden there, it might need some time-consuming "information mining" to unearth them.

十八大以来,以习近平同志为总书记的党中央,型持党要管党、从严治党, ..... 铁腕纠正“四风”,型持“老虎”“苍蝇” .....

Since the 18th [greater Central Committee's meeting] , the Party's Central Committee under comrade Xi JinPing, being [chosen] as its secretary general, is running the party in an exemplary way [as to] the need of discipline and by following a strict guidance of the party.
Correcting the "four styles" with an iron hand, and [giving an] example of [how to] manage, both, "the tiger and the fly".

[Source: China News Network 中新网 on November 14, 2013]


[Latest "decisions"] give impetus to a pushing forward of state owned enterprises [by striving for] perfection of modern business systems.

The expression "decisions 决定" is referring to a paper released by the Central Committee of China's Communist Party and that is summing up decisions regarding the reform of most important items.

[Source: 新民网 on November 15, 2013]

Here now some news on definite changes to take place in mainland China, even though not related to economics:

According to Western sources, China's national TV should have recently announced that China's long-standing one-child policy will soon be softened.
On the same occasion, it was confirmed that an often criticized habit of law enforcement authorities to take suspects in undefined custody will finally be stopped.


No comments: