China Research

Now it’s time again for the annual National People’s Congress (NPC), as usual in the Great Hall of the People in Beijing (March 5 – March 10). This year’s convention belongs certainly to the more interesting ones since hopefully more details on the already in November 2015 approved 13^th five-year plan will come out. Then, five major reform areas – among many others – were put in the first place: innovation, green development, expansion of economic activity on the internet, social insurance plus pensions and financial reforms. This is theoretically certainly more or less alright.

As we have learned from the Third Plenum in 2013, 60 special reform areas have already been addressed by China’s political leaders. Some of them have become more concrete in the meanwhile, others still need a lot of clarification. One concrete example: two-child policy was approved last year – but obviously there is no promising strategy for women on the labor market who will have or would like to have a second child. Consequently, there are currently a lot of doubts about the future success of the new two-child policy.

Some of the most important questions I would like to get answered at least partly by the NPC:

¤ time perspectives for a number of reforms (particularly for social reforms as an indicator for the new growth policy toward a higher share of consumption/GDP),

¤ more details on concrete changes and measures in the next five years (2020 is an evaluation year),

¤ the new GDP growth target (6 ½ % p.a.? Whatever one may think about GDP statistics …),

¤ priority of financial reforms (domestic reforms versus capital account deregulation),

¤ concrete achievements since the Third Plenum in November 2013,

¤ velocity so far of all the planned reforms (on time, lagging?).

Particularly the last two points do not seem to be matters of discussion. Here analysts need more transparency. Not so much focus should be, for example, put on the for China prestigious external question whether China should be treated as a market economy by the EU or not. (In my view, the answer should be “no”, simply because too much of the economy still is planned and influenced by the Chinese state; see also our latest blog by Rolf Langhammer who has a different opinion).

Anyway, it will be worthwhile to find out the degree of openness during and after the NPC. If interesting news can reach us, it would be fine. If not, the traditional communication and transparency shortcomings are still in place .

Hubert Fromlet
Senior Professor of International Economics, Linnaeus University
Editorial board

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