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Human Rights & Social Issues

China’s Xi Jinping outlines significant reform pledges


Xi Jinping

Xi Jinping

Party General Secretary Xi Jingping has outlined plans for significant economic and social reforms in a communiqué following the third plenum (a four-day meeting of the Communist Party), which ended on November 12th.

The plans, included in a 60-point document, outline a variety of pledges designed to assist the country in its on-going transition to ‘Developed’ status, and to prepare for a wider shift towards domestic demand-focused growth. The plans set out a ‘master plan’ for the next nine years of Chinese government and range from relaxing China’s one-child policy to tackling corruption. A useful summary can be found here.

MarketWatch has quoted Xi as saying: “The key is to build an environment for fair competition, to enhance the vitality of society and the economy, to improve government efficiency and capability, to realize social justice and fairness, to push for social harmony and better the leadership and rule of the Communist Party,”. Numerous news outlets are also noting that this plenary appears to have solidified Xi’s power and marked a slow-down in consensus-based decision making.

Among the plans most likely to have the widest impact are a relaxation of the hukou system (household registration) to allow greater migration to smaller cities, and increased market openness for privately owned companies and foreign investors. Whilst it will take some time for businesses and international investors to see the benefit of these plans, they have already been met with cautious welcome.

The document has been labelled ‘ambitious’ by the South China Morning Post and some analysts have already identified some contradictions. However, given that the document details only 60 points it is perhaps unsurprising that many of the finer details and technicalities have been glossed over.

Efforts to tackle indebtedness have also been outlined at both the national and regional level. Local governments will be given the opportunity to buy and sell bonds to facilitate infrastructure spending, although they will also face closer centralised scrutiny as a means to control regional debt levels. Further reforms will include a move towards more transparent budgets and debt-risk warning systems.

Bloomberg reports that an audit of regional debt levels was due for release by the Finance Ministry last month, although it is currently delayed. The efforts released in this report are understood to be part of a wider attempt to strengthen centralised control over the regions and to control diverse national debt. Such efforts will, however, be hampered by the continued relative strength of the shadow banking sector.

Human rights campaigners will also be pleased by the document. The government has committed itself to scrapping the labor camps – meaning more people will gain access to justice in a court. Furthermore, the imposition of a vertical management structure and a move towards court transparency may increase the strength of the rule of law.

Ultimately, these pledges should satisfy the majority of the critical players both at home and abroad. Reformers, foreign governments, and investors will be happy to note an increase in human rights concerns and continued desire to integrate with the global economy. Conversely, conservatives will continue to be pleased by the determination of the government to remain at the centre of Chinese society and on-going domination of the Communist Party in political life.

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