Without changing the system, Xi cannot guarantee the economic growth

[Ray]

China: the numbers game


Without changing the system, President Xi Jinping cannot guarantee the economic growth he needs

A Faustian pact exists between the leadership of China and its people. It goes like this: we see to it that there is food in your bellies and that your lives improve from year to year. In return, you leave the governing to us.

There is little contradiction in the eyes of the Chinese Communist party between the current crackdown on journalists, lawyers and human rights activists, and a heavily advertised central committee meeting next Saturday in which the ground rules for economic reforms could be discussed. In the former, "western forces hostile to China and within the country are still constantly infiltrating the ideological sphere", according to Document No 9, issued by the central committee in April. In the latter, ideas as western as government transparency, attracting private investment into utilities and incentives to reward the commercial development of land could be discussed. Going under another number – Plan 383 – it's a product of the same machine. For any survivor of the Long March, much of what happens now – in his name – must be anathema.

No one can deny that President Xi Jinping is in control. The presence in jail of Bo Xilai and countless other disgraced party officials, some linked to past leaders and rival factions, attests to that. But neither can Mr Xi's credentials as a bold reformer yet be discounted as hype. He himself has set expectations running high of what to expect next weekend when the third plenum of the 18th central committee meets. He told Barack Obama that the coming session would be the most important for China since the one Deng Xiaoping presided over in 1978, which heralded the opening up of the Chinese economy. It will contain, he has promised, not only a "master plan" but a "profound revolution". The sort of things to look for are: broader access to, and fairer allocation of, capital; banks with more private-sector participation, and the ability to set their own interest rates; state-owned enterprises that are more commercial and accountable; and liberalised energy prices.

The bigger question which lies behind each of these measures is how far Mr Xi is prepared as party leader to curtail the party's own grip on power, through state-owned banks, local government and companies controlled by the government, to stimulate this reform. For both sides of China's grand bargain are under attack. The party's ability to deliver growth is being challenged as never before. And the people, half of whom live in cities, are not as ready as they were to keep their heads down. They have questions to ask of top party cadres who send their children to be educated abroad. The hourly joust on Weibo, the Chinese version of Twitter, between user and censor is just one sign of the ferment beneath the surface.

Without changing the system, Mr Xi cannot guarantee the economic growth he needs to meet the growing needs of this vast industrial society. And yet each of these reforms could erode the stability that underpins one-party rule. Delay is no longer an option. China's output expanded transformatively from 2002 to 2012, but it can no longer rely on giant public works. Even though it is projected to rise by 6.5% a year, the economy can no longer grow its way out of danger. Rising labour costs at home and weaker overseas consumer demand for the workshop of the world both point in the same direction. And yet going down that path could have political consequences.

The rest of the world will have to wait a long time before the CPC willingly abandons its monopoly on power. But nothing stops experiments in intra-party democracy – in local elections, in making local government more transparent and accountable, or in giving more influence to the eight other democratic parties, which are minute, but still allowed to function. It's a balancing act. Mr Xi is no Mikhail Gorbachev. Indeed, the former Soviet leader is regarded by the Chinese as an object lesson in what not to do. But the opportunity for Mr Xi to make his mark is there to be seized. How he does so will determine the future of the world's fastest-rising power.

China: the numbers game | Editorial | Comment is free | The Guardian

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The concept that delights the Chinese is so long as the Govt sees to it that there is food in their bellies, money in their pockets and the illusion that their lives improve from year to year, they must be impervious to all the ills of the govt and in return, with kowtowing reverence, leave the governing to Communist neo Sultans and princelings and their cronies.

Document No 9, issued by the central committee in April states that "western forces hostile to China and within the country are still constantly infiltrating the ideological sphere".

How so?

If the CPC's neo Communist ideology is that wnderbar, as is claimed, then where is the chance of western forces hostile to China and within the country are still constantly infiltrating the ideological sphere"?

In short, the CCP's ideology is teetering, shaky and on very unsound foundations bolstered by Orwellian 'Double Think'!

The keyword here is blackwhite. Like so many Newspeak words, this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts. Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this. But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary. This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink. Doublethink is basically the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them.

The bigger question which lies behind each of these measures is how far Mr Xi is prepared as party leader to curtail the party's own grip on power, through state-owned banks, local government and companies controlled by the government, to stimulate this reform.

Can he?

I wonder!

Power is an elixir and in the CCP who have to watch your back. Bo Xilai would testify to the same as would many others.

Xi cannot guarantee the economic growth he needs to meet the growing needs of this vast industrial society. And yet each of these reforms could erode the stability that underpins one-party rule.

A dilemma.

Would be rise to the occasion?

 

[redragon]

Re: Without changing the system, Xi cannot guarantee the economic gr

stupid title, who can guarantee growth?? Obama?Singh? the reporter simply has lower and lower IQ

 

[rockdog]

Re: Without changing the system, Xi cannot guarantee the economic gr

After 10 years, the world's biggest economical entity will lead by a communism party...

I don't like CPC, but this party really done some kind of positive things to China. At that time, some same size nation, the biggest democratic nation would only has 1/5 GDP comparing China...

I am a pro-democracy guy, but i really don't know how to explain this fact when i have to tell my dislike of CPC to my friend. Can anybody help...

 

[Ray]

Re: Without changing the system, Xi cannot guarantee the economic gr

stupid title, who can guarantee growth?? Obama?Singh? the reporter simply has lower and lower IQ

Surprising statement from a people that lives, eats, sleeps, awakes on statistics and bandies it around as the proof of the pudding!

The keyword here is blackwhite.

Like so many Newspeak words, this word has two mutually contradictory meanings. Applied to an opponent, it means the habit of impudently claiming that black is white, in contradiction of the plain facts.

Applied to a Party member, it means a loyal willingness to say that black is white when Party discipline demands this.

But it means also the ability to believe that black is white, and more, to know that black is white, and to forget that one has ever believed the contrary.

This demands a continuous alteration of the past, made possible by the system of thought which really embraces all the rest, and which is known in Newspeak as doublethink.

Doublethink is basically the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them.

 

[Ray]

Re: Without changing the system, Xi cannot guarantee the economic gr

FOLLOWING THE CHINESE DREAM


My current visit to China has, so far, been extremely educative in terms of the effort to find out what China is all about. Visits to places in and around Beijing, the interaction with sections of local people from different walks of life and an avid reading of newspapers, magazines and other published material helped provide a limited understanding of the finer nuances in the thinking of the establishment and people and the working of the systems. The process has been exhilarating.

Communist China is very much a happening place. Never has there been a dull moment with the media, both print and electronic, reporting 24X7, developments including the latest jihadi suicide attack in the iconic Tiananmen Square, the public outcry over the denial of free to air television to a local company in Hong Kong, health hazards posed by growing pollution, the open trial of a former politburo member, Bo Xilai, the crackdown on activists and online "rumour mongering" and the conspicuous absence of the American president in the Bali APEC meeting.

These events have, however, been overshadowed by speculation, both domestic and international, over the likely nature and sweep of reforms that the 18th central committee, under the dynamic leadership of President Xi Jinping, may undertake. The plenum is slated for November 9 to12 at Beijing.

Historically, the third plenums have been known for the launch of major economic reforms by the party central committee of the time. In 1978, the 11th central committee under Deng Xiaoping launched the path-breaking reforms of China's economic development in the teeth of opposition and in the aftermath of the disastrous fallout of Mao Zedong's Cultural Revolution. Since then China has transformed itself, registering a meteoric rise to be the second largest economy in the world, clocking over 10 per cent growth on an average, with nearly 200 dollar billionaires from a mere three in 2003, besides hundreds of dollar millionaires today in just about 30 years.

In this background, it is but natural for national leaders led by Xi Jinping to express their views on important issues and challenges that face the party and the country. From seemingly unfettered coverage of the news with critical comments, the media appear to have become an informal conduit of communication and exchange of views between the government and the people, besides the party units.

The informal mechanism is seen to have helped educate businessmen, academics and others about the thinking of the leadership on reforms and other important issues. The minds of the people are also being conditioned to adapt to challenges and overcome problems by doing all that is necessary to help the party and the government.

For instance, the president has cautioned the people that they should be ready to sacrifice some economic growth for reforms and economic structural transformation. The prime minster, Li Keqiant, had earlier set the tone by deciding to set up the Shanghai Free Trade Zone to turn the city into a global economic hub and pave the way for the internationalization of the Chinese yuan. Meanwhile, seeing a riot of speculation, the Communist Party of China asked the senior politburo member, Yu Zhungsheng, to give a broad outline of the reforms stating that these were likely to be "deep, comprehensive" and "unprecedented". This has made a section of China watchers speculate that the reforms are likely to be more fundamental than in the past and embrace spheres beyond economic development.

An analysis of decisions taken by the previous plenums reveals that the reforms implemented since 1978 were all an integral part of a calibrated strategy chalked out by the Communist Party to bring about economic rejuvenation and development through urbanization, the restructuring of wage, price, market, rural economy and the scientific concept of development. This shows how focused successive governments have been in realizing the 'Chinese dream'.

However, over the decades, obstacles to development have grown, confronting the State with new challenges. These have got firmly entrenched. This may compel the third plenum to mark a departure from the past by unfolding reforms in social and administrative sectors. A section of hardliners in the party believes that economic growth and development have come at severe costs of graft, a weakening of social norms, indiscipline, wealth disparities, inequities and regional imbalances. The politburo standing committee cannot allow such aberrations or differences to fester.

The reforms are expected to be well structured, systematic and "without fundamental mistakes beyond rectification". What has always weighed with China is "money, power and face". Not even a momentary embarrassment can be brooked for the three to be undermined and impair the credibility of the party and the government.

The reforms package, being given final touches for presentation before the third plenum on November 9-12, may include the following :

(a) Some dilution in the role of the central and local authorities by effecting cuts on their approval powers as well as in the enormous numbers of projects dependent on such approvals; a tempering of the State monopolies and a further opening of the economy to private sector and investments in strategic sectors like banking, insurance, energy infrastructure, to provide a more level playing field vis-a-vis State owned enterprises; the creation of a Silk Road economy to tackle regional disparities in western China with Xian as the epicentre of development.

(b) Greater accountability in bureaucracy with publicity for deterrence; greater bureaucratic control to minimize interference in ventures under SOEs and greater management freedom in SOEs and education sectors by divesting the officers of ranks so that they do not work as arms of the government.

(c) Increasing domestic consumption through increased urbanization, and liberalization in house registration to facilitate the flow of migration of rural workers to cities with easy availability of social and welfare facilities in healthcare, education, pension; and opening service sectors to private investments.

If the past is any guide, those expecting the third plenum of the 18th central committee to embark upon political reforms also are going to be disappointed. The party has made it clear that its supremacy will not only be maintained but also strengthened through mass line actions and purification and ideological campaigns. The goal is to promote consolidation of party rule and its relevance.

The intensity of expectations triggered by the third plenum has been stupendous. It is attributed to the fact that the "scope and intensity" of reforms would mean a lot not only for the wellbeing of China but also for the region and the world at large.

Sceptics, however, maintain that the hype generated is media engineered. The sound and fury over the plenum may end in a whimper. Whatever is the outcome, China is likely to be guided by its strong pragmatism, caution and balance without any dilution in the authoritative control of the party while realizing its dream.
Following the Chinese dream


The author is former director of the Intelligence Bureau, and the former governor of Nagaland

 

[bennedose]

Re: Without changing the system, Xi cannot guarantee the economic gr

stupid title, who can guarantee growth?? Obama?Singh? the reporter simply has lower and lower IQ

Stupid comment. The communist party of China has to guarantee growth.

 

[amoy]

Re: Without changing the system, Xi cannot guarantee the economic gr

Stupid comment. The communist party of China has to guarantee growth.

For once I support u! Every ruling party in every society has to deliver their KPIs (Key Performance Indicators), among which economic growth for sure is a priority. In India BJP or Congress risk losing election if they fail to curb the rocketing ONION prices. If any of them fail to address people's verybasic concerns (onion) they are deemed as incompetent, thus held accountable, aren't they!? http://defenceforumindia.com/forum/politics-society/55294-onion-crisis-death-upa.html What can be expected of them if they even fail the people with the very fundamental?

 

[bennedose]

Re: Without changing the system, Xi cannot guarantee the economic gr

After 10 years, the world's biggest economical entity will lead by a communism party...

I don't like CPC, but this party really done some kind of positive things to China. At that time, some same size nation, the biggest democratic nation would only has 1/5 GDP comparing China...

I am a pro-democracy guy, but i really don't know how to explain this fact when i have to tell my dislike of CPC to my friend. Can anybody help...

No. No one can help. As long as China is doing what is admired by the "leaders of the world" - the USA and the west, China cannot be wrong. Shiny concrete and glass cities, car parks out of grassland, conspicuous consumption, more money, are all admired. No one grudges China its economy and no one grudges China its growth.

However there is plenty to be suspicious of China for non Chinese countries. The methods followed by China are guaranteed to succeed in the short term and we are still in the short term. What might happen in the long term is another matter. The US's consumption was backed by a supply chain of raw materials from all over the world with the most critical supplies being protected by a powerful military.

China will face a resource crunch long before all its people reach even half the prosperity levels that the US has reached. China will then be competing for resources with the US, India and other large nations - all of whom have a stake. What this means is that China's rate of growth is going to slow down. That slowdown will come before all Chinese have reached the ideal level of prosperity desired. Of course by that time China will have the world's biggest economy - but that fact per se will not help make every Chinese reach top living standards. None of these things are remarkable in themselves. Countries regularly see downturns in their economy.

But economic downturns need to be handled well by the government because they can lead to violent demonstrations and even revolution. Most Chinese seem quite happy with their lot - and that is their right, given China's progress. But the Chinese communist party often displays signs of anxiety about how they will cope. To outside observers the communist party have used coercion in ways that are known to lead to problems some time down the line. How they manage these problems remains to be seen. China has a huge internal security apparatus that is in keeping with the need to coerce - but even that can come under stress depending on what happens with the economy. It is the inequality that will be a problem.

I suspect that the US and China are helping each other out. The consumers of the US are being supplied by cheap labour from China. The cheap labour are not paid much in absolute terms but they are getting a lot more than before. I think the Chinese communist party may be trying to increase consumerism within China by rapid urbanization - large and populous countries can benefit from that. But much depends on resources, and the environment.

Another issue is demographic. China's socialist system allows pensions for some but not for others. Traditionally it was the city dwellers that got pensions and not the rural folks. but if there is a massive move to the cities, China will have to generate funds to pay pension to the migrants. And as the population gets older China will have to pay pension to 4 or 500 million old people. In the 1960s China simply stopped pension eligibility by fiddling with the rules. The coercive system can do that. The Chinese people may buck and absorb that insult too - but no one can be sure.

If the communist party is bluffing - that bluff will be called. Difficult to tell what shape that will take.

Do Chinese pay direct taxes like "income tax"?

 

[Armand2REP]

Re: Without changing the system, Xi cannot guarantee the economic gr

Yes, you pay payroll tax out of your check.

 

[roma]

Re: Without changing the system, Xi cannot guarantee the economic gr

After 10 years, the world's biggest economical entity will lead by a communism party.
I don't like CPC, but this party really done some kind of positive things to China. At that time, some same size nation, the biggest democratic nation would only has 1/5 GDP comparing China...
I am a pro-democracy guy, but i really don't know how to explain this fact when i have to tell my dislike of CPC to my friend. Can anybody help...

it's a hangover of the anti-soviet days

let's get a new leadership in the usa, and re-distribute the manufacturing opportunities that china had been given

let's see corruption lessen in india ,.....let's see Vietnam and indonesia and south america , mexico develop mfg opportunities

dont worry , dragon's present position is by no means final

 

[amoy]

Re: Without changing the system, Xi cannot guarantee the economic gr

it's a hangover of the anti-soviet days

let's get a new leadership in the usa, and re-distribute the manufacturing opportunities that china had been given

let's see corruption lessen in india ,.....let's see Vietnam and indonesia and south america , mexico develop mfg opportunities

dont worry , dragon's present position is by no means final

pls don't over-indulge in fantasies like "US leadership re-distribute"¦". capital (FDI / mfg) as usual pursues wherever its profit can b maximized instead of (always) following the White House. lately Walmart chose to quit India so did Nokia!? this tells much abt how investment friendly India is. again your endogenous variables r decisive.

Sent from my 5910 using Tapatalk 2

 

[Ray]

Re: Without changing the system, Xi cannot guarantee the economic gr

With the increased pay for workers in China and the growing clamour for more, China could become a costly labour market.

We will have to await was is the Grand Economic Plan Xi is about to bring out of the magician's hat.

 

[badguy2000]

Re: Without changing the system, Xi cannot guarantee the economic gr

With the increased pay for workers in China and the growing clamour for more, China could become a costly labour market.

We will have to await was is the Grand Economic Plan Xi is about to bring out of the magician's hat.

some day, China would be a costly labour macket,when CHina is already a developed country as rich as west Europe.

 

[Ray]

Re: Without changing the system, Xi cannot guarantee the economic gr

'New Deng' hype around Xi meeting

- Talk of China 'master plan' for reform

Shanghai, Nov. 9: In an army-run hotel in Beijing today, China's top leaders began a four-day secret meeting that might usher in the biggest change in China since Deng Xiaoping opened up the country to the world.

The third plenary session of the 18th central committee of the Communist Party of China may well decide if President Xi Jinping is the new Deng. But analysts and observers are already comparing this session with the historic third plenum of the 11th CPC central committee in 1978, at which Deng stunned the nation — and the world — with his dramatic reform agenda.

Xi himself has raised the great expectations by talking of a "master plan" for reform and of a "profound revolution" that China needs to take the next big leap forward. Backing his dream is a new team of thinkers, led by Li Keqiang, the English-speaking, reformist Premier, and a host of pro-market advisers.

The Beijing session will discuss a draft resolution of the central committee on "major issues concerning comprehensively deepening reforms".

In a significantly worded statement issued on the eve of the session, the CPC political bureau set out the goal of the next generation of reforms: "We should let labour, knowledge, technology, management and capital unleash their dynamism, let all sources of wealth spread and let all people enjoy more fruits of development fairly."

Here in Shanghai, hopes are high about the next reforms. Conversations quickly turn to what Xi's reforms agenda may or may not mean.

Most newsstands display newspapers and magazines, general or financial, that have brought out special issues on China's age of reforms. Pictures of Deng, former Premier Zhu Rongji, Xi and Li adorn their covers. But there is scepticism too.

"In China, reform is all about making the rich richer," a professor of broadcasting at the journalism department of the prestigious Fudan University here, who did not want to be named, told me during a late-evening conversation in a bar.

Although the third plenum is taking place in Beijing, the new era of reforms is believed to have begun here in Shanghai when the government announced its decision in September to set up the country's first free trade area here.

It is a far cry from the time when conservatives in the communist party opposed the government's decision in the late 1980s to open Shanghai to foreign capital. They accused the then reformers of reviving the era of foreign "concessions" in Shanghai. The sceptics lost out eventually.

That is now history. But even this time, the government's plan to set up the free trade area is said to have been opposed by some top policymakers, who complained that the unchecked entry of foreign capital into the free trade area could threaten China's financial security. However, Xi and Li had their way.

For the third plenum, though, the reforms road is long and tortuous, most analysts agree. The issues that cover the reforms agenda range from the economic and the financial to the social and the environmental. They also embrace crucial urban as well as rural issues.

In fact, rural reforms are said to be a top priority at the plenum in Beijing. The urban-rural gap in income, social security and opportunities has become a major cause for social unrest in recent years.

Villagers are deprived of rights to land and ownership of property that come easily to the rich and even the common people in urban areas. Their deprivations make the villagers easy targets of corrupt party overlords, while city dwellers live relatively free from the party's control of their private lives.

The Beijing conclave comes in the midst of Xi's intense anti-corruption drive that has felled many top party and government officials. And he has won the first rounds, as the fall of Bo Xilai has proved.

There are other corruption cases, like the one against Zhou Yongkang, until recently the country's internal security chief, that are testing Xi's power and control of the party.

But the fact that he at least initiated the investigation against Zhou suggests that he is not afraid to strike at powerful people.

Zhou was a member of the standing committee of the political bureau in the last central committee. There has never been a case so far of a man in such a high position being charged with corruption and abuse of power.

But what hopes for political reforms? A full-page article yesterday in the People's Daily, the party organ, was a clear enough indication that liberalising politics is not on Xi's — or the third plenum's — agenda.

The article recalls Xi's thesis, which he articulated last January, that "one should not use post-reform history to negate the pre-reform years". It also says that one should not "exaggerate" Mao Zedong's mistakes but should acknowledge his "contributions".

But then, as an analyst here put it to me, China has a tradition of a leader being an economic rightist and a political leftist at the same time.

"Deng himself is the best example --- remember the reformer was also the leader who ordered the Tiananmen Square massacre (in June, 1989)."

‘New Deng’ hype around Xi meeting

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Illusions

Illusion is the first of all pleasures.

 

[Ray]

Re: Without changing the system, Xi cannot guarantee the economic gr

some day, China would be a costly labour macket,when CHina is already a developed country as rich as west Europe.

Why is it that the industries are relocating elsewhere?

 

[bennedose]

Re: Without changing the system, Xi cannot guarantee the economic gr

In many ways, political parties in a democracy have it easy (or more difficult, depending on how you see it). If their policies for economic development (or human development) fail, they simply lose power. Their personal power and perks go and some other party gives it a try. The other party need not follow the same policies and new corrupt (or honest) people can come to the fore until they are judged at the next election.

In China the party is never out of power. No matter what the economic policies do, success or failure, the party remains in power. If the policies work, staying in power is easy because there will be less opposition. "Freedoms" tend to take a back seat when one has an empty stomach.

However in China if the policies fail overall, or if the policies fail some people, the CPC party can never get out of power. But there may be dissatisfaction, but internal security can suppress protests to a large extent. Diversion of people's attention to "national crises" caused by external aggression from traditional/historic foes is another way of tiding over failure of economic policies. But protests that need to be suppressed are a theoretical possibility only when people are dissatisfied. As long as the Chinese economy expands and more people are brought into wealth the chances of major upheavals are low. But getting 1.3 or 1.4 billion people to achieve a lifestyle that is even 25% of what the US has reached is not going to b easy because the US itself is an overuser of all resources. Even if the US cuts down its usage by 75% the average US citizen will still be consuming more of the world's resources than current world supplies can meet if everyone competes for them at those levels. Adding a China to that only puts more pressure and that pressure is made more acute as India, Russia add to the development bandwagon.

The question is, will the wealthy in China accept a tightening of the belt to ensure that the poor become better off even when the economy slows down, or will the wealthy try and retain their profits and perks and let the poor go screw themselves. It is the CPC that decides this. if the poor appeal to the CPC, does the CPC help them? But the CPC's money and power is driven by the wealthy. So what will they do? They cannot simply call for election and let someone esle take over.

Capitalism is about allowing the creation of wealth. That is what China has done. But capitalism also allows retention of wealth at the expense of others. Retention of wealth by a few at the expense of the poor led to the French and Russian revolutions. It was the French model that has continued to work. The Russian model collapsed. China copied the Russian model. How will they bypass or avoid collapse when faced with the same crises.

If you are poor and suffering while others around you are wealthy and doing well, do you blame the wealthy, or do you blame the leaders. Are the leaders the same as the wealthy, helping the wealthy stay that way? Or can the leaders redistribute wealth from the wealthy to feed the poor? But will the creation of wealth stop if the wealthy are punished for being wealthy - as the goose that lays golden eggs is killed?

China faces the same problems as anyone else, but has no visible mechanism for leaders to arise from anywhere in the country except via the route of a narrow ideology. That narrow ideology technically does not allow private ownership of land and assets and does not allow private wealth creation and retention. The CPC is treading a fine line where party membership pretends to follow communist ideology but that ideology is diluted and bent depending in the context and individual. By itself this is only mildly interesting to others. Who cares. But the care comes because of Chinese military expansion and the military's role in internal and external security. China uses its soldiers mostly for internal security. But sooner or later, they will be used to attack someone else. The US does that to keep its military-industrial complex in good working order with domestic orders from the US military. How long before China does that?

 

[Ray]

Re: Without changing the system, Xi cannot guarantee the economic gr

Since Bllomberg is banned in China, here is some excitement I leave for the Chinese to feel elated that they have been able to buck the system.

China's Communist Party Meets to Map Out Economic Changes

Leaders of China's ruling Communist Party started a four-day conclave in Beijing today where they may chart out the biggest economic and societal changes to the country in a generation.

Potential reforms include loosened controls on interest rates and the yuan and closer supervision of local-government finances, according to analysts including Zhang Zhiwei, chief China economist at Nomura Holdings Inc.

State media have hailed the third plenum -- so called because it's the third meeting of the party's Central Committee since a November leadership changeover -- as a "watershed" for reform as China seeks to move to an economy focused on domestic demand instead of state investment and exports. The 1978 plenum ushered in market-oriented policies that spurred average annual growth of more than 10 percent for 30 years.

VIDEO: SOE, Land Reforms Would Help China Growth: Zhang
"We will see a new round of comprehensive economic and also political reforms in the coming years which will put China on a more solid foundation for sustainable growth," Li Daokui, a professor at Tsinghua University and former adviser to China's central bank, told Bloomberg Television.

Topping the agenda will be a discussion "on comprehensively deepening reform," the official Xinhua News Agency said in an English-language report released at 11:34 a.m. local time today to announce the start of the meeting.

The plenum will 'deliberate on a draft decision" of the party's central committee on "major issues concerning comprehensively deepening reforms," it said, without giving details. Xinhua used the phrase "comprehensively deepening reform" three times in the four-paragraph report.

Sweeping View
Reflecting the significance that Chinese state media are giving the event, the People's Daily, the main newspaper of the Communist Party, yesterday presented a sweeping view of China's history since the party's 1949 victory in a front-page article. The piece cast this year's meeting as a bookend to the era that began with the 1978 gathering.

Yu Zhengsheng, the fourth-ranking member of the 85-million member party, said last month that the plenum would usher in "unprecedented" economic reforms. The official Xinhua News Agency said Nov. 4 that the plenum would be a "watershed as drastic economic policies will be unveiled," including giving more scope to market forces and an overhaul of the household registration, or hukou, system that limits labor mobility.

High Expectations
"Third plenums have this aura in terms of making dramatic pronouncements," said Robert Lawrence Kuhn, author of the book "How China's Leaders Think." "Expectations are very high in China for this, and anything less than that is going to be a disappointment."

If the 2008 third plenum is any precedent, the Central Committee's roughly 200 members and 170 alternates will make few announcements during the event, and conclude with the release of a communique outlining the party's road-map. After the 2008 conclave, which took place at the height of the global financial crisis, the party highlighted its plans to double rural incomes and boost consumption.

Ahead of this year's gathering, President Xi Jinping embarked on a campaign to crack down on graft and extravagance in the party. Party members criticized themselves and their supervisors in sessions across the country, and sought to rejuvenate ties with ordinary people through a so-called mass line campaign that had some officials living with rural families.

Spot Checks
Police have also set up what they call the "Beijing Security Moat" to prevent anything from upsetting the gathering. Public Security Minister Guo Shengkun made surprise spot-checks of security measures at the Tiananmen East subway station on Nov. 4, his ministry said Nov. 5.

That's the station outside the Forbidden City, where a sport-utility vehicle crashed and blew up on Oct. 28, killing its three occupants and two bystanders. The government blamed the incident on a terrorist group from western China's Xinjiang region.

On Nov. 6 a series of explosions outside the provincial party headquarters in the northern city of Taiyuan killed one person and injured eight. Yesterday, police arrested a 41-year-old ex-convict who confessed to the crime, Xinhua reported.

"The plenary session will play a very important role in the process of China's reform and opening up," Foreign Ministry spokesman Hong Lei told a briefing in Beijing yesterday. "We believe this meeting will achieve full success."

China's Communist Party Meets to Map Out Economic Changes - Businessweek

 

[Ray]

Re: Without changing the system, Xi cannot guarantee the economic gr

@bennedose,

Yours at Post #16 is very apt and well analysed.

The surprising part is that China is like the military.

And yet not like the military.

In the military, if you make a bloomer or lose a battle, you get sacked.

But in China, the Leader can run the country to the ground and still continue and enjoy all the perks of office for himself and his family and his extended family and continue to make hay while the sun shines!

 

[bennedose]

Re: Without changing the system, Xi cannot guarantee the economic gr

Bo Xilai Supporter Sets Up New Party as Communist Leaders Meet - Bloomberg

A Chinese academic and supporter of Bo Xilai set up a political party to push the ruling Communist Party to obey the country's constitution, and made the ousted Politburo member its chairman.

Zhi Xian, which means supreme authority of the constitution, was founded on Nov. 6, three days before the country's top Communist leaders started a four-day summit to map out a blueprint for economic and social reforms. Bo, who was sentenced in September to life in prison for bribery, abuse of power and embezzlement, has been named its "chairman for life," said founder Wang Zheng.

The Communist Party has ruled China since 1949 and while the country has eight smaller non-Communist parties, they aren't independent and there's no official opposition. Writer Liu Xiaobo was sentenced to 11 years in jail in 2009 on a charge of plotting to subvert the Communist Party after helping to organize Charter 08, an open letter calling for direct elections and freedom of assembly.

"I set up this party because while this society has laws, it is not ruled according to the law and that is very apparent in the Bo Xilai case," Wang, an associate professor of international trade at the Beijing Institute of Economics and Management, said in a telephone interview today. "Our goal is to correct the ruling party's violations of the constitution. We are not trying to stop one-party rule."

About 370 of the Communist Party's top officials, including President Xi Jinping, Premier Li Keqiang, government ministers, military officers and heads of state-owned companies, are meeting in Beijing for what's known as the Third Plenum, to agree on an economic and social road-map for the next decade.
Corruption Campaign

Bo was mentioned as a possible candidate for the elite Politburo Standing Committee before his ouster and his sentence fits a broader campaign against corruption that Xi has said poses a threat to Communist rule. His trial broke with precedent because the court where it took place released edited transcripts of his defense. Bo denied all the charges.

"This could be the arch conservative faction of the party putting pressure on Xi Jinping to make some concessions regarding reform policies during the plenum session," Willy Wo-Lap Lam, an adjust professor of history at the Chinese University of Hong Kong, said by phone today. "I don't think that this new party will survive too long however, as Xi is very focused on uniformity of thinking within the party."

Wang, who is in her late forties, said she notified China's nine political parties as well as bodies including the National People's Congress, the country's parliament, that she set up the organization. So far there has been no reaction from the authorities, Wang said, although she said she and others have had "special treatment" for the last year, with their freedom to travel limited.
One-Party Rule

"We are not trying to stop one-party rule," she said. "Concentration of power keeps the country from chaos but this concentration of power must be done according to the law."

Wang wouldn't disclose how many people have joined the party but said the number had exceeded her expectations. Membership figures will be announced at the party's first congress which may take place in six months' time, she said.

Wang said she has never met Bo, a former commerce minister whose last post before his March 2012 ouster was as the party's top official in the southwestern city of Chongqing. He was suspended from the Politburo a month later and accused of serious disciplinary violations after his wife, Gu Kailai, was accused of murdering British businessman Neil Heywood. Gu was later convicted and given a suspended death sentence.
Silent Approval

An invitation was sent on Oct. 8 to Bo through his lawyer to become head of the party, Wang said. She hasn't received a response, "which means I accept it as silent approval," she said

Bo attracted support for his brand of leadership, which stressed cutting wealth disparities. He gained popularity for cracking down on organized crime in Chongqing and his efforts to improve urban life.

"What Bo did in Chongqing was to carry out the constitution," Wang said. "What Bo did for the people was for real."

 

[no smoking]

Re: Without changing the system, Xi cannot guarantee the economic gr

Why is it that the industries are relocating elsewhere?

Because new generation Chinese don't want that sweat ship jobs any more, they got better position. On the other hand those indians, vietnamins are desperating asking for it.:thumb: