The first policy agenda from Chinese President Xi Jinping was released at the end of the Third Plenum of the Central Committee of the Communist Party of China (CPC). If it generates disappointment, that is because far too much was expected. The Chinese economy was opened up by Deng Xiaoping as early as 1978. China chose the path of a socialist market economy in 1993. At the third Plenary, China’s decadal policy was unveiled. With Xi as President, the session assumed the importance of 1978 and 1993. There was much ballyhoo about China taking a new direction with large scale reforms. However, the final communiqué was long on rhetoric and short on specifics. It called for a decisive role for market forces. At the same time, the CPC exercises strong control. The areas calling for urgent attention were financial sector liberalization, increasing competition along with reform of state-owned firms, boosting urbanization through household registration reforms, reform of land laws, local government funding and tackling environmental damage. The communique approved curtailment of investment restrictions, more rights to the farmers and greater transparency in taxing and spending. But it left out financial sector reforms, urbanization and even avoided the term ‘private sector’.
China is a global economic driver but facing challenges. The threats are the problems of the middle income group, ageing population, mounting debt and corruption. Localized protests are rife. There was a suicide attack at Tiananmen Square and bombing outside the CPC office. It means instability. Plans are being made to set up a National Security Committee a la KGB. It would make Xi Jinping more powerful than his immediate predecessors. The world is looking forward to more light being shed on Chinese economic reform.