China’s Third Plenum Report Vague, But, Markets Should Play “Decisive Role” in Economy

Members of the Chinese Communist party met this
weekend for the
Third Plenum, a session where the party broadly sets its
economic and political agenda for the coming years. This one was
the first held since Xi Jinping took office as president, and so
has been highly anticipated by China watchers. As usual for
political statements in the Communist country, the plenum’s report
was vague. The Global Post
suggested:

Even under ordinary circumstances, interpreting Chinese
politics is notoriously difficult. The system is opaque and
convoluted, with ritualized language, cookie-cutter leaders and
lots of befuddling slogans — see “The
Three Represents.”

But the communiqué released Tuesday evening after a four-day
conclave of top Communist Party officials may be a high-water mark
of mind-numbing vagueness.

The Post went on to dismiss the report as a “Rorschach
test” (more about the word cloud from the BBC, pictured, here)
and interpreting it to an exercise in cloud watching. However,
as CNBC notes, third
plenums are often followed by major reforms. And so there could
be,maybe, some
good news for free markets as the document calls for a
“decisive role” for markets in China’s economy as a centerpiece of
the (centrally) planned reforms. The South China Morning
Post
explains:

For the first time, the party also said the private
sector should be treated on the same footing as state-owned
enterprises. It said: “Both the public and private sectors are the
same important components of a socialist market economy and the
important bases of our nation’s economic and social
development.”

The party decided to set up a powerful organ to steer the reform
crusade. “The central leading group on comprehensively deepening
reforms will be responsible for the overall reform design … and the
implementation of reform policies,” it said.

On other fronts, the party vowed to “promote the rule of law and
respect for the constitution”, which will be crucial for a
market-oriented economic system to flourish.

The only actual result of the plenary session so far has been
the establishment of two new committees, one to direct economic
reforms, the other national security strategy, in case anyone
thought to question the party’s dedication to central planning and
the politics of committees.

Previously:
Hayekians in China