Xi Jinping

Xi Jinping must make government credible, then reform it

Public expectations high for systems overhaul, but many still doubtful new leader will deliver

PUBLISHED : Sunday, 18 November, 2012, 12:00am
UPDATED : Sunday, 18 November, 2012, 8:01am

New Communist Party leader Xi Jinping faces mounting calls to overhaul the nation's economic and political systems - and public expectations are high.

But Xi's first challenge would be to restore the government's credibility, analysts say.

Xi's debut speech as party leader at the Great Hall of the People last week fuelled hopes that the next decade will see serious reform and a crackdown on corruption.

But many people question just how much the new administration can do when it comes to pushing through the difficult reforms that their predecessors failed to make.

"It's easier said than done," say those on Chinese social media as they caution about the likely outcome.

The people's doubt leaves Xi with a tough mission to convince them he is not just talking big.

"Verbal commitment to reforms no longer has the kind of impact it had in the past," said Barry Naughton, a veteran China researcher at the University of California, San Diego.

"China's reform today faces a credibility problem," he told an audience at a financial summit held by Caixin Media yesterday.

His view was echoed by China International Capital chairman Li Jiange , a prominent academic who used to work as a secretary for former premier Zhu Rongji . Zhu is known as "China's economic tsar" because of a series of bold reforms he launched in the late 1990s.

The next generation of tougher reforms have left people arguing that some goals set by the Hu-Wen government have never been met.

An example, Li said, was the government's commitment to break the monopoly of state-owned enterprises and open up key industries to private companies. The State Council led by Wen Jiabao had rolled out a series of guidelines, known as the "new 36 articles", pledging to encourage private investment in industries such as banking, energy and mining.

But private entrepreneurs invited to a meeting held by the Chinese People's Political Consultative Conference showed indifference towards the new rules, Li said. "They dared not compete with the SOEs because many lessons had been written in blood teaching them that any money they invest may be lost forever."

To shore up weak confidence in the government's dedication to reform, Naughton said Xi's administration should make "a small number of well-chosen, early, credible commitments" on reforms in an effort to change the overall policy environment. Doing so would make the new leadership "very popular" and lay the foundations for tough reforms, he said.

He suggested that the government set rules to prevent SOEs from taking advantage of their monopoly to expand into new sectors.

The leadership, Naughton added, should also set clear timetables for certain reforms, for example, requiring SOEs to be restructured into joint-stock firms by the end of next year, and firing directors who fail to meet the deadlines.