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More Markets, And More Communism: China’s New Reform Drive

The Path to Socialism with Chinese Characteristics

BEIJING – Xi Jinping, general secretary of the Party’s Central Committee, delivered a work report to the Third Plenary Session of the 18th CPC Central Committee which lasted from 9-12 November this week.

The work report speaks about the modernization of the governing system, a more public-service oriented government, leaving the markets: “a decisive role in allocating resources.”

At first, this looks like more government, not less. However, in previous years markets were given just a “basic role.”

Urbanization is next growth engine

The motto ‘Socialism with Chinese characteristics’ is stressed on several occasions. Analysts are now waiting for the publication of the Session’s proceedings for clarification. The world is watching: China’s growth in the past relied on export and real estate, so the economy is now overheating and pushing a housing bubble. Observers are expecting reforms that could make urbanization China’s next growth engine.

A National Security Council

China will soon establish a ‘National Security Council’ – same name as its US counterpart. Critics say it resembles the original extrajudicial Law Committee established during the Jiang Zemin era. It would give Xi Jinping consolidating power toward the Party’s Central Committee and away from the State Council.

China still a developing country

The work report must be seen in the greater picture: China still considers itself a developing country. Its aim is to complete modernization within 100 years since the foundation of the People’s Republic of China. So, in 2013, China is roughly half-way through that process. China doesn’t seem to want to lead the world, although the state-controlled Xinhua News reported that “China’s reform drive will benefit the world.”

Leading the world not just yet

China seems more concerned about its modernization than being the world’s leading power. Its new reforms aim at pushing through needed market reforms, bank reforms, environmental issues, increasing public spending, facilitating urbanization, keeping social harmony, and consolidating the Communist Party’s grip on power.

Image credit: jimmiehomeschoolmom/

Read it at Bloomberg


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