Breaking Down China's Reform Plan

December 2, 2013 Topic: Politics Region: China

Breaking Down China's Reform Plan

Baby steps or revolution?

China’s much-anticipated Third Plenum of the Eighteenth Central Committee concluded on November 12, 2013. The initial communique underwhelmed China watchers worldwide. Even Chinese citizens were left scratching their heads about what the difficult-to-decipher and propaganda-laden document really signaled. But then, a few days later, a far more detailed “ Decision on Major Issues Concerning Comprehensively Deepening Reforms ” was released by Party Central. The Decision, twenty-two thousand characters long in Chinese, allegedly identified more than three hundred specific reform measures in sixty separate categories. The media roll-out reported that the document had been in preparation for seven months, had involved a multitude of institutional and individual input, and had been led by paramount leader Xi Jinping himself. President Xi not only personally presided over the drafting process and the plenum itself, but he also delivered a lengthy “ Explanation” that summarizes the lengthy decision and instructs party cadre on how to interpret it.

So is all the hype that has been heaped on the Decision warranted? What is the world to make of it? Is it the blueprint for China’s future that many—most notably the Chinese government itself—claim it to be? What exactly does it call for? How does the Decision envision the country developing over the next few decades? Above all, can it be implemented?

The Decision and the Explanation are an odd mixture of ambition and caution. The reformist rhetoric is indeed encouraging, as China definitely needs a bold new vision and leadership at this juncture in its development, but the vague wording and lack of specificity in the released documents suggest a lack of determination, irresolution of certain issues, deep debates behind the scenes, and anticipated bureaucratic resistance.

Nonetheless, two elements are noteworthy. First, the magnitude of the effort is recognition by the leadership that China faces unprecedented challenges that must be grappled with. This is hardly a new realization, as the last Hu Jintao-Wen Jiabao government made many pronouncements that the macro growth model needed adjustment and the World Bank’s China 2030 report (co-written with the State Council and issued earlier this year) spelled out the changes that needed to be made in considerable detail. Thus this is hardly a new revelation. But what is new is the systematic and comprehensive approach reflected in the Third Plenum documents. Previously, the government had only offered piecemeal and incremental proposals. So, the Plenum is the first serious attempt by the Chinese government to grapple with the full and complex agenda of issues.

Second, the Decision and Explanation are—in places—refreshingly candid and objective about the high number and seriousness of the problems facing the party-state. Recognizing and acknowledging problems in a direct fashion is the first, and most important, step towards effectively addressing them. To wit:

 

At present, extensive and profound changes have occurred in the internal and external environments. China's development faces a series of outstanding contradictions and challenges. There are still many more difficulties and problems waiting for us in the future. For example, the lack of balance, coordination, and sustainability in development is still outstanding. The capability of scientific and technological innovation is not strong. The industrial structure is not reasonable and the development mode is still extensive. The development gap between urban and rural areas and between regions is still large, and so are income disparities. Social problems have increased markedly. There are many problems affecting people's immediate interests in education, employment, social security, healthcare, housing, the ecological environment, food and drug safety, workplace safety, public security, law enforcement, and administration of justice. Some people still lead hard lives. The problems of going through formalities, bureaucratism, hedonism, and extravagant practice are outstanding. Some sectors are prone to corruption and other misconduct, and the fight against corruption remains a serious challenge for us. The key to solving these problems lies in deepening reform.

Such sober admissions are refreshing and a clarion call to deal with them. But unfortunately, such candor in admitting the challenges is not matched by specificity in how to deal with them. While not as laden with mind-numbing propaganda as the Plenum Communique, the Decision and Explanation are nonetheless quite vague overall and obscure the issues more than they clarify them. This is not to say that there are not some places where specific proposals are offered; e.g., loosening of the one-child policy, abolition of the “reform through labor” system, an enhanced role for the market in determining resource allocation, making government budgets more transparent, more fully funding public welfare expenditures, granting rural farmers greater property rights, and creating some new bureaucratic mechanisms such as the State Security Committee, the Leading Group on Comprehensive Deepening of Economic Reform, and hints about a super environmental agency, so that there is “a single department in charge of regulating and controlling all land space usage within the country’s territory and to uniformly carry out protection and restoration of the mountains, waters, forests, fields, and lakes.”