Government meetings are often defined by a lot of hype and little substance. China’s third plenum, one of the most important leadership meetings where long-term economic policies are set out, is supposed to be different. Yu Zhensheng, one senior politburo member, recently said that the structural reforms that will be laid out during the next few days will be “unprecedented”.
Suppose that Mr Yu is right. This would mean agricultural reforms such as allowing farmers to monetise their land, further liberalisation of the financial sector, and reducing the influence of state-owned enterprises to improve efficiency of capital deployment. The problem, of course, will be implementation.
Take SOEs as an example. This group, some 145,000-strong, were in retreat in the 1990s when many factory workers were laid off (just ask any Chinese taxi driver). But since the financial crisis, this seems to have gone into reverse as Beijing’s stimulus went mostly to SOEs to drive investment, as well as to build up strategic industries, from telecoms to steelmakers.