The Global Economy in Turbulent Times

CHAPTER 139 China: The Third Plenum Reforms Are Well Received, but the New Deal Flashes Danger Signals¹

On November 15, 2013, soon after the third Plenum of the Communist Party of China’s Central Committee had completed deliberation on its massive document, “Resolution Concerning Some Major Issues in Comprehensively Deepening Reforms” (the Resolution), it published in Beijing an impressive 22,000-word blueprint of decisions for social and economic change over the next decade, unpromisingly titled “Decision on Major Issues Concerning Comprehensively Deepening Reforms” (the Decision): Its mission is to return the state to the golden era of wealth and power (fuqiang). Indeed, it attempts to resolve an ongoing contradiction—advance both power of the state and freedom of the individual.

Hints of this direction in reform were already made known in the “383 plan” of China’s official think tank (Development Research Centre of the State Council, i.e., China’s Cabinet). The symbol “383” reflects the plan’s contents: interaction among the nation’s three economic drivers—government, market, and business; the eight major areas of reform—competition, governance, finance, fiscal, urban–rural divide, state-owned enterprises (SOEs), liberalization, and innovation; and finally, the interplay of three interrelated objectives—inclusiveness, domestic–external balance, and eradication of inequality and corruption. True to its billing, the decision pledged wide-ranging reforms.

Now for the Action ...