REFORMS IN CHINA : A LIGHTER SHADE OF RED
While the first 12 months following Xi Jinping’s election to the role of general secretary of the Communist Party in late 2012 were characterised by a clear change in leadership style, vagueness surrounded the true intentions and capabilities of the new government, which promised a “Chinese dream” of “great rejuvenation”, but lacked specifics.
Xi’s robust presidency has certainly kept the topic of reform high on the political agenda, but it has taken a year for the shape of these reforms to crystallise. Following the Third Plenum held in late 2013, a 60-task plan on economic and policy changes was published that included various specific bold reforms that reveal Xi to have made an incisive diagnosis of China’s structural economic and social challenges.
However, now that the Plenum is complete, the party’s appetite for change, and Xi’s leadership and resolve, are going to be tested to the extreme.
Xi’s team has given itself until 2020 to achieve “decisive results”. On its current trajectory, declining productivity growth and soaring debt look set to beset China over that period. If Xi is able to reset the country’s direction through reform, he will be hailed as China’s most important leader since Deng Xiaoping. This change of direction will have significant consequences for investors, and the implications for those looking to engage commercially with China over the long term could not be more dramatic.
Full article available at: http://www.tfreview.com/feature/regions/lighter-shade-red-year-horse
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