The Third Plenary Session of the 18th Chinese Communist Party (CCP) Central Committee (Nov 9-12) is making headlines, and for obvious reasons. The exact agenda has not so far been officially released and in making overall assessment, one has to wait till there is a public announcement of the decisions taken on the occasion. It’s, however, possible to draw certain tentative conclusions through paying close attention to information on the Plenum available through open sources, especially to those revealing an insight into the Chinese perceptions. This entails a careful examination of the important statements made by the country’s leaders, the contents of authoritative policy documents released as well as the analyses, which have appeared in the Chinese state-controlled media.
Firstly, not to be missed are the prevailing high expectations in China on the Plenum taking important decisions on future directions of the country’s reforms policy. Opinions in China believe that the forthcoming session is going to be as ‘historic’ as the previous plenums like the one held in 1978 that saw the veteran leader Deng Xiaoping launching the programme of opening China to the outside world and the other convened in 1993 during which the then party chief Jiang Zemin activated the’ socialist market economy’ drive, leading eventually to China joining the WTO.
Turning to the statements coming from the leadership, those being made by the CCP chief Xi Jinping are obviously the most important. Xi observed (July 2013, survey in Hubei) that “reforms should aim at “surmounting institutional barriers in major areas that are restraining growth.” He added “for this, needed is even more political courage and wisdom.” Later, he identified financial sector liberalisation, support for corporate research and development, environmental taxes, as reform targets for China (speech at the Asia-Pacific Economic Cooperation Summit, Bali, 14 October 2013). Of late, he revealed that a “blueprint of comprehensive reform” will be put forward at the Plenum’ (speech at a meeting of foreign delegates attending the “21st Century Council” think tank, Beijing, 3 November 2013). Notable also are the remarks (Beijing, 26 October 2013) of Yu Zhengsheng, a Politburo standing committee member that the Plenum would “principally explore the issue of deep and comprehensive reforms and that reforms this time will be broad, with major strength, and will be unprecedented.”
There are also official documents in China the contents of which have hinted at the nature of likely initiatives at the Plenum. Among them is the “383” report, released by the National Development Research Centre (NDRC) of the State Council October-end, 2013. Jointly authored by Liu He, Advisor to Xi Jinping and Li Wei, aide to former Premier Zhu Rongji, it sought to redefine and reduce the government’s role in the economy. The given name 383 needs to be understood in the context of the report’s recommendations – favouring tripartite reforms in the fields of market, government and corporations, reforms in eight core sectors of finance, taxation, state assets, social welfare, land, foreign investment, innovation and good governance and three reform packages aimed at relaxing control over market access, establishing a basic social security package and allowing sales of collectively-owned rural land. The “383” report specifically asks for the internationalisation of the yuan within a decade and the liberalisation of interest rates within three years, making a demand in addition to expanding urbanisation in China, along with gradual phasing out of the old household registration system (hukou), which continues to discourage migration.
Prominent among messages on the Plenum’s likely agenda being conveyed through the Chinese official media, include the one (Xinhua, People’s Daily, November 6 and 8, 2013) which said that the gathering would deal with China’s reform which has entered a “deep water zone” and accelerate “new round of reform, which is expected to steer the country into an historic turning point and transform its growth pattern, while simultaneously handling intricate problems and conflicts brought along by its past development, like the heavy cost of land, energy consumption, environment and cheap labour”. Yet another comment (Global times, 9 November 2013) implicitly endorsed the need for the state to pass control over major sectors to civil society in the interest of fairer competition for all enterprises and predicted that the Plenum will push China to take historical steps forward through pragmatic and orderly decisions. As per a view subsequently noticed (Global Times, 10 November), “the biggest obstacle in the path of reform is not whether reform is needed, but rather, formulating a road map of reform accepted by most groups in society, which has to be both progressive and balanced”.
The Chinese official media are also giving political messages prior to the plenum focusing on the central idea that reforms cannot be done without the CCP’s leadership. A 10000-character full page article entitled, “Correctly Treat the Two Historic Periods Before and After the Reform”, contributed by the party’s Institute for Historical Research, published in the People’s Daily echoed Xi Jinping’s views expressed in January 2013 that “one should not use post-reform history to negate the pre-reform years.” Giving a warning to those who preach indiscriminate copying of the Western system, it condemned efforts to undermine the party’s legitimacy by “negating” tragedies such as the Cultural Revolution, which preceded the reforms course started in 1978.
The Shape of Things to Come
Taking together the statements from leaders, contents of official documents and media pronouncements in China as given above, a broad picture on the likely shape of the Plenum seems to emerge which is as follows:
I) Terminologies like “new round of reforms”, “comprehensive”, “unprecedented’, “historic turning point”, ‘transformation of growth pattern” used officially while referring to reforms indicates the chances of Xi Jinping leadership taking bolder reform initiatives than before, in the current Plenum.
II) Care will be taken to arrive at a consensus in the party on decisions to further deepen reforms, keeping in mind the interests of diverse sections of the society; however, Xi Jinping’s mention of the need for “political courage,” signals that reaching a consensus may not be easy. Meaningful in this regard is the current reference to the Plenum taking ‘pragmatic and orderly’ decisions.
III) Judging from Xi Jinping’s calls in recent times for the party to promote a ‘mass line’ approach, the emphasis being seen in China on waging ideological struggles and tightening control over the internet and media, coupled with reiteration in party dailies to conduct reforms under the CCP leadership, one can rule out any advance in the Plenum over the issue of political reforms; the rhetoric on political restructuring will however find an echo on the occasion.
IV) Formulations are likely to be announced in the plenum to address the issue of how to reduce the government control over economy.
V) It is probable that a target date may be fixed in the Plenum for internationalisation of Yuan currency. Xi Jinping’s mention to financial sector reforms, is notable in this context.
VI) A strong possibility is adoption of fresh rules in the Plenum with regard to ‘Hukou’ system, (household registration system) for easing existing regulations on migration. This will be in accordance with the recommendations given by the NDRC in June 2013 to transform rural residents fitting certain criteria into urban residents by lifting the hukou control of all small cities and towns and easing the limits on the hukou of middle-level cities in an orderly way; the NDRC ‘s logic is that the HuKou system puts agricultural population in an inferior position compared to the urban labour and works against the declared goal of healthy urbanisation in the country.
VII) No major statements or media articles have been noticed so far on the desired further reforms in the State Owned Undertakings (SOEs). It’s not clear how the Assets Supervision and Administration Commission of the State Council (SASAC) is striving to make the SOEs competitive internationally.
VIII) The Plenum may decide on new land reform policies that would allow farmers to sell their rural properties.
IX) Tax reform and family planning rules, environmental issues and the question of corruption may also be on the agenda of the Plenum
(D.S. Rajan is the director of the Chennai Centre for China Studies. A former director in the Cabinet Secretariat, Government of India, Rajan is the editor of six books on China. This article has been written exclusively for www.indiawrites.org)
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