Communist Party third plenum
The Chinese Communist Party's third plenum of the 18th Party Congress traditionally sets the economic tone for the Chinese government's next five-year term.
True test of China's reform will be in the details
The communiqué issued after a secretive four-day policy meeting of nearly 400 top mainland officials can be seen either as a glass half full or half empty, depending on the expectations of the beholder. The latter, negative perception is reflected in the Hang Seng Index, which led Asian markets down yesterday. Disappointment in the markets over the vagueness of broad and bold-sounding economic reform objectives is understandable.
But that, for better or worse, is the way China does things. This kind of document does not usually contain much detail. The true test of the reform credentials of new Communist Party head Xi Jinping and his leadership team is yet to come. The third plenum of the Central Committee has set the direction and tone for China's development over the next decade or more. The focus over the weeks and months ahead will shift to the release of details by government authorities and the substance of implementation.
The communiqué revealed a specific reform to co-ordinate national security through the formation of a state security committee, and broad consensus on economic reform, to be guided by a central leading group, but not on political reform. That Xi was able to push through the former when previous such efforts have failed testifies to his growing authority as leader. The lack of detail aside, the plenum sent a strong message about economic reforms - the glass-half-full view. The communiqué said party leaders are going to allow market forces to play a "decisive role" in allocating resources. The language makes it clear that while the state sector remains the mainstay, the state and private sectors are equally important in a socialist market economy.
Despite commentators' scepticism about economic reform without liberal political reforms, the communiqué contained no reference to them, except for making the judiciary more independent. Thanks in part to hype from state media and senior officials, expectations were high for unprecedented reforms of the state enterprise monopolies, local government finance and the hukou - the iniquitous household registration system - to name a few not mentioned or briefly mentioned in the communiqué. These remain key to sustainable economic growth that would enhance the legitimacy of the party's hold on power. The details and implementation of broad reform pledges will be what help shape Xi's legacy as a reformer.