In Seven Years

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At the Third Plenary Session of the 18th CPC Central Committee held in November 2013， China’s ruling party laid out the blueprint for deepening reform in the coming years. The CPC plans to achieve“decisive results” in its push for reforms by 2020. What changes could be expected in this coming seven-year span？ What will China be like by the end of this period？

A modernized administrative system of governance with noticeably improved governance capacity will take shape. State governance is a new concept for China. It boils down to the relationship between government， the market and civil society， according to Li Yang， vice president of the Chinese Academy of Social Sciences. China’s reforms are intended to establish a coordinated interactive mechanism between these three institutions to ensure comprehensive harmony across the country. Prof. Xu Yaotong of the Chinese Academy of Governance explains that the term encapsulating the relationship between the state， society and the people has evolved from the original “state ruling”to “state management” to that now established as“state governance.” Prof. Xu holds that modernized governance implies a scientific approach， greater democracy， and higher levels of institutionalization and standardization. These changes in terminology reveal the ruling party’s conceptions of governance.

The market will play the decisive role in future economic development. One highlight of the third plenum is that of the market playing the decisive role in allocating resources. “By placing the priority of economic reforms on smoothing out the government-market relationship and emphasizing the decisive role of the market， the meeting clarifies the direction of China’s marketization reforms as well as that in which the government is heading to transform its function，” commented Chi Fulin， president of the China Institute for Reform and Development. A greater role for the market in China’s economy will boost fair competition among businesses， ensure the market determines pricing mechanisms， help to establish a unified land market in rural and urban areas， and enhance financial markets.

Economic restructuring will be achieved. Over the past 35 years， China has secured high growth based on export of low-added-value goods and huge government investments. This pattern is， however， unsustainable. Former Goldman Sachs Asset Man- agement Chairman Jim O’Neill recently observed that with the current might of China’s economy， it is contributing more than US $1 trillion to the world GDP every year a sum sufficient to create any such economy as Italy， Switzerland， India， Indonesia， and Turkey China must switch to a new path of growth. His advice was that a more balanced economy would entail a larger share for private consumption， in particular more spending by the country’s hundreds of millions of migrant workers， along with reduced surpluses in trade and current accounts. O’Neill is optimistic about the future success of China’s economic restructuring.

China will become more open. Abreast of globalization trends， China will further relax controls on foreign investment and accelerate development of free trade zones to expand the opening-up of both coastal and inland regions. This move spells increasing business opportunities for international investors. In September 2013 the Shanghai Pilot Free Trade Zone， the first FTZ within China’s borders， was launched， sending a clear message to the world that China will open its doors even wider. Bai Ming， a researcher with the Ministry of Commerce， predicted that an overall plan would be introduced by China to spur further opening-up of the whole Chinese economy through development of the Shanghai FTZ. More FTZs are planned in western China’s Chongqing， in central China’s Henan， Anhui and Hubei provinces， in Guangdong and Zhejiang provinces， and coastal Tianjin and Xiamen.

Reforms to the administrative system will also advance in the coming seven years. This will result in enhanced rule of law， social equity and welfare of the people， greater urbanization， further industrial restructuring and upgrading， a healthier ecosystem， and closer exchanges and cooperation with the world.

The “decisive results” of the reforms envisioned by the CPC meeting by 2020 are expected to foster more stable and mature institutional systems in major aspects of Chinese society， allowing more people to share in the fruits of reform and development， while opening up new opportunities for winwin cooperation with the international community.

Tang Shubiao