35 years on, China ready for new round of reform

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35 years on, China ready for new round of reform

(Xinhua) 09:04, November 08, 2013

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BEIJING, Nov. 7 -- As China's reform and opening up moves into its 35th year, the policy that lifted China's largely rural, impoverished economy to the world's second-largest economy has also sailed into "deep waters," leaving Chinese society and the rest of the world wondering whether and how China's reform will proceed.

Chinese President Xi Jinping on Saturday told a group of foreign members of the 21st Century Council in Beijing that China will firmly continue pushing ahead with its reform and opening up drive.

"The more developed China is, the more open it will be. It is impossible for China to shut the door that has already been opened. There will never be an end to reform and opening up," said Xi.

Xi, who is also general secretary of the CPC Central Committee, told the global think tank members that a blueprint of comprehensive reform will be put forward at the forthcoming Third Plenary Session of the 18th Communist Party of China (CPC) Central Committee from Nov. 9 to 12.

Past Third Plenums Reveal Reform Tracks

Since China embarked on its reform and opening up in 1978, CPC third plenums have undertaken the same important task of enacting major economic reforms while also providing a window into the governance characteristics of the country's central leadership.

Professor Xie Chuntao with the Party School of the CPC Central Committee said the first and second plenums are usually about personnel issues, while the third plenum is known for its big moves on issues.

The decision to open up the once secluded country and reform its sluggish economy first came in 1978. Between Dec. 18 and 22 of that year, the 11th CPC Central Committee convened its third plenary session in Beijing, adopting a historic decision to restore order by turning away from chaotic class struggle and focusing on economic development through the launch of the reform and opening up policy. The meeting is regarded as a historical turn for China.

The next third plenary session was held in October 1984, which expanded reform to cities.

The Third Plenary Session of the 13th CPC Central Committee in 1988 decided to rectify the economic environment and order.

The year 1992 marked the beginning of a new phase in reform. During a historic 1992 inspection tour of economic zones in south China, Deng Xiaoping, the principal architect of China's reform, made announcements giving momentum to economic reform.

Later that year, the 14th CPC National Congress was convened, and the establishment of a socialist market economy was announced as the next objective in economic reform.

In 1993, the Third Plenary Session of the 14th CPC Central Committee outlined the basic framework for a socialist market economic system and specified that the market, under state macroeconomic control, should be the basic means of allocating resources in China's economy.

In the next three third plenums, economic reform was still on the top of the agenda. The third plenum in 1998 set a goal of building a socialist countryside, while the third plenum in 2003 further specified the road map for deepening reform, and the most recent third plenum in 2008 focused on reforms in rural areas.

Zheng Yongnian, director of the East Asian Institute at the National University of Singapore, told Xinhua the upcoming third plenum is under a global spotlight because each third plenum since 1978 has kindled great public expectations and determined the priorities of the party in the following years.

"The 18th CPC National Congress (in 2012) has been clear about what kinds of reform and development China will pursue in the new era. The direction is clear. The third plenum is to draw up an action program based on that," Zheng said.

Reform Path Demonstrates Reform Resolve

In December 2012, Xi Jinping arrived in Guangdong Province, the reform's frontier, and began his first inspection tour as new party chief.

On Dec. 8, Xi presented a flower basket to the bronze statue of Deng Xiaoping. Xi said "We came here to revere the statue of Deng Xiaoping to show that we will unswervingly push forward reform and opening-up and strive to achieve new progress, new breakthroughs and new steps in boosting reform, opening up and the country's modernization drive."

At the end of 2012, the Political Bureau of the CPC Central Committee held a group study on "unswervingly pushing forward reform and opening up," and Xi stressed the party should improve reform policies by learning from the people and demand that achievements benefit more people in a fairer way.

In July 2013, Xi spent three days surveying the issue of deepening reforms in Hubei Province. While there, he said China must deepen reforms in major areas with "ever more political courage and wisdom" to surmount the institutional barriers that are restraining growth.

"There is no way out if we stay still or head backward," he said.

The new central government, which was formed in March, has abolished or transferred 221 administrative approval items to local governments.

In July, China's central bank canceled the floor on lending rates, and in September, the China (Shanghai) Pilot Free Trade Zone opened, providing a testing ground for the deregulation of interest rates in China.

China's gross domestic product growth accelerated to 7.8 percent in the third quarter, up from 7.5 percent in the second quarter, bringing an end to the slowing growth rates in the first half of the year.

Analysts say that, starting this year, China's institutional reform, which aims to streamline administration and decentralize power at its core, has produced more and more "dividends," playing an important role in the rebounding and upgrading of the Chinese economy.

New Reform Season for China, New Opportunity for the World

After 35 years of reform and opening up, the once agricultural China now stands as the world's second-largest economy and top holder of foreign reserves.

With steady and rapid economic growth in the country, millions of Chinese have been lifted out of poverty. Half of its population now lives in cities, and farmers are now free from agricultural tax, which was abolished in recent years, and a social insurance system covering 1.3 billion people has come into shape.

Despite these changes, China is confronted with grave and pressing problems such as the urban-rural gap and income disparity. The country also has its hands full in improving health care, education, housing and the environment for its people.

Analysts agree that China's reform has entered "deep waters" where it must address protracted problems in a society with more diverse and conflicting interests.

Nonetheless, the analysts say currently there is still a strong consensus on reform in China.

Qin Gang, professor with the Party School of the CPC Central Committee, said as the society is diversified and different groups expect different things from reform, it is only normal to have a reform debate.

He believes that reform must address public expectations and demands, such as narrowing the income gap, social equality, and an end to corruption through institutional changes.

Professor Wang Huaichao with the party school said there is no disagreement on whether China needs further reform, the debate is on the sequence, degree and measures of reform.

The priorities of reform were laid out at the 18th CPC National Congress in 2012, said professor Xie Chuntao, and they include how to adjust state-market and government-society relations and how to enhance supervision of power.

Li Shenming, vice president of the Chinese Academy of Social Sciences, predicts that while past third plenums had placed the emphasis on economic reform, this meeting would underline "comprehensiveness," demonstrating Beijing's confidence in its path, theories and system.

"Opportunity" is the catch word that the experts interviewed say reform in China will bring to the world.

Professor Zheng Gongcheng with Beijing's Renmin University of China said reform in China has not only brought about enormous internal change, but shared China's development experience on the world stage.

"Over the past 30 and more years, reform in China drew upon international experience while creating and applying its own wisdom. Such wisdom brought a Chinese perspective to common global challenges," said Zheng.

In an atmosphere of lackluster global recovery, said Zheng Yongnian, the performance of the Chinese economy is under the international microscope. It is not unreasonable to contend that China's internal economic vitality will drive the world down a similar vital path.