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Wednesday, 23 July 2014

Thinking in threes

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

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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Context News

China’s ruling Communist Party will hold the third plenary session of its central committee on Nov. 9-12. The meeting brings together the 200-member central committee of top party members. It will mark roughly a year since the appointment of Xi Jinping as Party secretary.

The meeting would be a “new historical beginning”, said the official Xinhua news agency on Oct. 29. Yu Zhengsheng, China’s fourth ranked politician, said on Oct. 27 that the “third plenum” would yield “unprecedented” economic and social reforms.

On previous occasions, the third plenum has been associated with sweeping changes. In 1978, Deng Xiaoping, then China’s paramount leader, used the plenum to announce an end to the planned economy, ushering in the subsequent rapid growth of the non-state sector.

At the third plenum in 1993 President Jiang Zemin endorsed a recently mooted idea of building a “socialist market economy” by 2000. Two weeks before the plenum, Jiang gave a speech praising Deng, in which he proclaimed that “one fifth of mankind will uphold socialism”.

The plenum is typically followed within a few weeks by a meeting of the Central Economic Work Conference, which is jointly organised by the Party and the government. China’s ruling party and government are separate, though top positions in both are often held by the same people.

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