HONG KONG – At the Third Plenum of the 18th Central Committee of the Chinese Communist Party, currently under way in Beijing, President Xi Jinping is unveiling China’s reform blueprint for the next decade. In advance of its release, the Development Research Center of the State Council, China’s official think tank, presented its own reform proposal – the so-called “383 plan” – which offers a glimpse of the direction that the reforms will take.
The need for reform in China is well documented. In order to escape the so-called “middle-income trap” – when a developing economy’s growth levels off, instead of advancing to high-income status (defined in July 2013 by the World Bank as per capita income of at least $12,616) – the underlying structural problems of China’s economy must be addressed.
And the pressure is on. With per capita income of more than $6,000, Chinese are becoming more demanding, insisting on safe food products, clean air, transparent government, affordable housing, quality education, social security, and equal opportunities. At the same time, international calls for China to assume the responsibilities of a major power – not only in areas like trade and investment, but also on issues like environmental protection and global governance – are growing louder.
But the kind of deep and comprehensive reforms that China needs are always difficult to implement, given that they necessarily affect vested interests. In order to win public support for reforms, thereby maximizing the chances of success, the government must offer clear, accessible explanations of its goals. (Japanese Prime Minister Shinzo Abe’s bold economic-reform package, for example, is couched in terms of “three arrows” – namely, monetary and fiscal policy, and structural reform.)