China’s Plenum Test

Outside China, the prevalent view among business leaders is that President Xi Jinping’s new administration has consolidated its power and acquired enough authority to push through far-reaching economic reforms. Unfortunately, this view is both too sanguine and naïve.

TOKYO – There is something odd and disturbing about the conventional wisdom surrounding the upcoming Third Plenum of the 18th Central Committee of the Chinese Communist Party (CCP). As the November 9-12 conclave draws near, the international community’s attention seems to be focused mainly on technocratic policy changes deemed essential to restructuring China’s state-dominated economy and reenergizing growth.

Will the government liberalize interest rates or loosen capital controls? How will the fiscal system be revamped? Will land reform be part of the package?

The list of such questions goes on. Outside China, the prevalent view among business leaders is that President Xi Jinping’s new administration has consolidated its power and acquired enough authority to push through far-reaching economic reforms. He and his colleagues need only to get the specific policies right.

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