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Thursday, November 14, 2013

Xi concentrates power and ends Deng's "crossing the river feeling the stones"

News analysis
By Francesco Sisci

Informed South Asians tend to have a day-to-day and even hour-to-hour updates of the developments in the West. Also, the liberal democracies in the west, even if not so, tend to project themselves as very transparent regimes. None of these, however, holds true in case of China and it is a sort of enigma for many in the region. While both admirers and bashers of China can be found, an objective assessment of the situation in China is rather infrequent to come by.
So what is China really up to? Where are the country and its rulers, the Communist Party heading? In this short but comprehensive column, Francesco Sisci sums up the latest developments in the wake of momentous decisions taken by the authorized body of the Chinese Communist party. He argues that the much needed reforms are now on right track as a result of decisive push by the new Party General Secretary and President Xi Jinping. 
BEIJING - Concentration of power in the hands of the top leadership, a new phase of economic reforms with an expanded role for market forces, and a greater role for the judiciary are the main elements emerging from the communique of the Third Plenum of the 205-member Chinese Communist Party Central Committee that concluded on Tuesday. All point to the opening of a new chapter for comprehensive change in China.

The concentration of power appears to be the strongest feature. The plenum has approved the establishment of two new bodies, which had no precedent in the old structure of the Party.

One is a "leading group" (lingdao xiaozu) in charge of the "overall deepening of reforms, responsible for the comprehensive design of reforms", the control of their application and implementation. The communique does not say who will be in charge of this group, but it should report ultimately to Party General Secretary and President Xi Jinping.

This is a new way to face reforms. Whereas Deng Xiaoping 35 years ago launched China's opening up without a clear plan and with a very foggy goal, the Party's desire for a clear plan and a goal means it has entrusted a special body to oversee this aim. It is not clear who the members of this group will be, but many may be handpicked by the president.

Another special body is established in charge of national security, with domestic and external responsibilities. This council could include not only military and civilian representatives of foreign affairs, but may bring in economists and experts on finance and trade to make a comprehensive assessment of the issues key to national security.

A third element that indicates a stronger role for Xi is in the language of the communique. Xi is the only living leader named in it; apart from him only Mao and Deng are named, the heads respectively of the first and second 30-year periods of the People's Republic. Xi's two predecessors, Jiang Zemin and Hu Jintao, are present only through mention of their respective theories, "the three representatives" and "scientific development".

However, despite the new bodies and Xi's prominence in the script of the Plenum, the actual reforms coming out of the meeting are not very significant. This seems to point to strong internal opposition to reforms - which are going to cut down many privileges of vested interests and state-owned enterprises (SOEs) - and to Xi's preference for a gradual approach.

In any case, the market and the judiciary are two clear areas of reform. On the economy, the Plenum wants to give more space to market forces, although this does not mean the total withdrawal of the state. The actual details about this are very significant. The Plenum pledges to "put in motion (tuidong) a system of good and modern enterprises for the SOEs, [and] support (zhichi) the healthy development of the non-state-owned economy".

In the other words, the SOEs have to be reformed and private companies have to be sustained. Clad in this jargon, there is still a clear message for the Party that a general change of direction is occurring. The change will not happen in one day, but that the Party promises it will happen.

In the past few days, the official New China News Agency has reported that SOEs will be more open to accepting private investment capital. That will weaken the state's controlling hand in the economy and inject more efficiency in the system.

Francesco Sisci is a columnist for the Italian daily Il Sole 24 Ore. He also maintains a popular colmn SINOGRAPH in Asia Times Online in which he delves on both the short-term and long-term trends emerging in China. His e-mail is fsisci@gmail.com
This column first appeared in AToL's SINOGRAPH and has been published here with personal permission from the author. 

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