SANF 13 No 35
A major policy conference in China in November will review the development priorities in the world’s second largest economy and influence the direction of the global economy for the next decade.
Major economic plans are likely to be discussed, and there have been indications from the leadership that a Master Plan will be presented for approval at the meeting.
This Third Plenum of the 18th Central Committee of the Communist Party of China takes place from 9-12 November at the Great Hall of the People in Beijing, and is the first major policy conference presided over by the new President, Xi Jinping, one year after a new generation of leaders took office.
The fourth-ranked leader in the ruling party hierarchy, Yu Zhengsheng, speaking at end of October, described the reforms to be discussed at the plenary session as “unprecedented”.
President Xi will preside over this meeting of 376 of the party’s top leaders. The members of this Central Committee have been in place since late last year and are elected for a five-year term.
A number of meetings (plenums) are held during the five-year term and this where major policy decisions are approved. The Third Plenum usually focuses on economics.
The Development Research Centre of the State Council (DRC), a key government think tank, released its proposal in late October for the reform framework, which is the “3-8-3” project.
This refers to three “key concepts”, eight “areas of reform” and three “correlated reform combinations”. The plan highlights three key themes: improve the market system, transform the role of government, and build an innovative corporate structure. Eight key reform areas are presented: government, monopoly sectors, land system, financial sector, tax system, management of state assets, innovation and further opening up of the economy. The new areas of reform combinations proposed are: open up, social security reform, and land reform. The Third Plenum of the Central Committee has been historically a focus of China’s major reforms, including the radical reform programme of then Premier Deng Xiaoping in 1978 which marked the beginning of market reform.
The Third Plenum in 1984 shifted the reform from rural to urban areas, to speed up city-centred reform, and in 1993, the Third Plenum of the 14th Central Committee endorsed the Master Plan for establishing a “socialist market economy” which initiated a series of fiscal, state-owned enterprise and banking sector reforms. The Third Plenum of the Central Committee in 1998 set up the target of a new socialist rural area with Chinese characteristics, and adherence to household responsibility as a basic system, with land contracts for agriculture and rural works extended for another 30 years.
A decade later, in 2003, the public ownership was strengthened in the commercial sector through shareholding, and all sectors opened to non-public enterprises.
The Third Plenum of the 17th Central Committee in October 2008 decided to improve the rural land management system, establish a modern rural financial system, and develop modern agriculture.
Chinese economist Jian Chang has noted that economic growth tends to slow in the years following the Third Plenum meetings, reflecting the fact that structural reforms, while good for the longer term, tend to slow growth in the short term. sardc.net
