China’s Plenum Reforms May Depend on Xi’s Leadership Skills

China’s Plenum Reforms May Depend on Xi’s Leadership Skills

The Chinese Communist Party’s Third Plenum culminated last month with the release of a reform-minded document outlining significant changes in 60 key areas of the Chinese economy. In targeting government monopolies in industry, as well as controls on the flow of capital, goods and people, while calling for upgrading the quality of governance, the document successfully identifies many of the major bottlenecks to continued rapid socio-economic development. Coupled with recent events in the political sphere, the agenda represents the emergence of President Xi Jinping as a leader and the benchmarks by which he will be judged between now and the plenum’s key target date of 2020.

Although light on policy details, the document is noteworthy for pulling together multiple strands of reform, many of them long-discussed, and presenting them as a unified framework with the clear backing of senior leaders. Less top-down and authoritarian than many recent policy edicts, it apparently reflects the new administration’s commitment to tackling the challenge of real structural and institutional reform, required to sustain China’s high-growth potential in the medium to long term.

A clear factor in doing so is Xi’s relative dynamism as a politician. Hu Jintao, Xi’s immediate predecessor, operated essentially as a technocrat with no great desire or capacity to take charge of the political discourse. Xi’s political background and greater ability to communicate a workable agenda for reform, coupled with an earthier, less rigid public persona, have allowed him to apply meaningful pressure on vested interest groups and begin improving the quality and implementation of central government policy. Measures such as easing the one-child policy, loosening the housing registration (hukou) system and closing labor camps represent something of a rewriting of the day-to-day parameters in which state and individual interact.

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