On Friday, Beijing released the 20-page, 60-point ‘CCP Central Committee Resolution Concerning Some Major Issues in Comprehensively Deepening Reform‘ (translated into English by Rogier Creemers at China Copyright and Media). Outlining a broad range of policy priorities, the new document “fills in the gaps” left by the Third Plenum Communiqué released earlier in the week. From Bob Davis, Richard Silk and Dinny McMahon at The Wall Street Journal:
The earlier document, loaded with party jargon and contradictory at points, had led many analysts and ordinary Chinese to wonder whether the leaders would take any decisive steps to revamp the economy, and whether Mr. Xi, who had ramped up expectations for comprehensive reform during his first year in office, had been stymied by powerful interests opposing change.
The far more ambitious plan released Friday night, on the one-year anniversary of Mr. Xi’s ascension, showed him, at least on economic issues, clearly siding with reformist elements within the party.
[…] The test now for Mr. Xi will be how to implement the plan’s goals, including whether they will be introduced in coming months or more gradually. The leadership is likely to face resistance ranging from local governments to state enterprises and the bureaucracies that oversee them. Many of the goals adopted by China’s previous leadership, under former President Hu Jintao, were never completed.
“The direction is significant,” said U.S. Treasury Secretary Jacob Lew, who met Mr. Xi and other top leaders on Friday and commented before the plan was released. “But the character and the pace of change matters.” [Source]
On the economic front, the Journal’s Aaron Back wrote, the announcements are “a welcome indication that Beijing understands the economic challenges the country faces.” Even so, “given Beijing’s track record of over-promising and under-delivering, skepticism is in order.” The Economist’s James Miles also outlined the obstacles ahead:
More details of what Mr Xi has in mind are likely to emerge in the weeks ahead. Party and government leaders will hold another meeting in December to decide an economic strategy for the coming year. A similar meeting devoted to rural issues will be held later in the month. The rhetoric is very positive. But Mr Xi will have to battle a deep resistance to change among state-owned enterprises, local governments, and even an urban middle class that likes his notion of “social fairness” but does not want to see its own privileges eroded by the granting of equal access to health care and education to migrants from the countryside. As the resolution rightly said, reforms have entered “deep water”. [Source]
Already, though, the document is helping to cement a reassessment of the Plenum and Xi’s position that was already gathering pace before its release. This view holds that Xi “is far more powerful than his predecessor Hu Jintao, and is swiftly building the centralized bureaucratic machinery needed to overcome institutional resistance and achieve his aims” (Arthur Kroeber at Foreign Policy); “in ‘Godfather’ mold, looks assertive and even imperial” (Chris Buckley at The New York Times); and “has made himself the most powerful leader since Deng Xiaoping. That is probably a good thing” (The Economist).
WSJ’s China Real Time has posted a landing page for its articles on various aspects of the reform blueprint, while People’s Daily Online hosts a similar overview from Xinhua. Reuters pulled out key quotes from the document, covering hukou household registration, pricing of water, power and other resources, the financial system, state-owned enterprises, taxes and government spending, land rights, corruption and the Internet.
Educational reforms are also part of the package, notably including de-emphasis of the currently crucial gaokao university entrance exam and efforts to “to cultivate all-round students.” The two long-awaited promises that have attracted most attention, though, are a relaxation of the one-child policy and the abolition of re-education through labor. The University of California’s Susan Shirk and Human Rights Watch’s Kenneth Roth discussed these on PBS Newshour:
Dr. David Kelly also talked about these and other reforms and their context and historical precedents on the Australian Broadcasting Corporation’s Saturday Extra.
As Caixin had earlier reported, and the National Health and Family Planning Commission subsequently denied, the new family planning rules will allow a second child for couples with one only-child partner. (An exception already exists for couples of two only-children, among others.) This represents a still troubling encroachment on reproductive rights for some, a moot point for others given the prohibitive expense of raising a second child, but an enormous and welcome change for others still. Moreover, Gady Epstein wrote at The Economist’s Analects blog, the new exception could herald the one-child policy’s eventual abolition:
The new bit of loosening, announced today amid a series of reforms decided at an important plenum held this week by the Communist Party Central Committee, should allow perhaps 10m families to have a second child, estimates Wang Feng, a demographer at the University of California, Irvine. Of those, he figures half will do so in the next few years, creating a bump (as opposed to a boom) of perhaps 1m to 2m more babies a year, on top of 16m births a year now. The smallness of that bump would be a big deal politically. Conservatives have long played on fears of unleashing pent-up reproductive demand to keep the one-child policy in place.
“This policy change should assure policymakers that the Malthusian fear is unwarranted and lead to a quick full abolishment of the policy,” says Mr Wang, referring to the theory that population will increase faster than the means to sustain it. He, like many of his colleagues in China, believes the one-child policy should be scrapped immediately. China’s demographic landscape has aged dramatically: the labour force shrank in 2012 for the first time in almost 50 years, and the ratio of taxpayers to pensioners will decline from almost five to one to just over two to one by 2030. Fertility rates in Beijing and Shanghai are among the lowest in the world. [Source]
Family planning authorities have played down the changes, however. From Raymond Li at South China Morning Post:
Wang Peian, the deputy director of the National Health and Family Planning Commission, said that allowing couples to have a second children when only one parent was an only child represented a minor change. He even disputed using the word “relaxation” to describe it.
“Adjusting and perfecting birth control policies is not tantamount to relaxing the work of birth planning,” Wang said at a question-and-answer session, according to the commission’s website. “Family planning policy should be maintained in the long term.”
He said the party would not abandon its three-decade-old birth control system any time soon, and ruled out allowing all couples to have two children. [Source]
In any case, Carl Bialik wrote at The Wall Street Journal, the new exemption will not stave off the challenges posed by a growing elderly population supported by a shrinking workforce, but might help China’s soccer team.
“We may see a few more million babies born in the coming years than otherwise, but it will not answer China’s deeper demographic challenge: that it is getting old before it gets rich,” said John D. Minnich, East Asia Analyst for Stratfor, an Austin, Texas, think tank.
[…] The greatest initial impact won’t be demographic or economic, Prof. [Yong] Cai said. “The long-term effect will be, relatively speaking, mild. Sociologically, politically, psychologically, it is very important. It sends a good signal to the Chinese people: You have more freedom.”
[…] Xiaobo Zhang, senior research fellow at the International Food Policy Research Institute, a Washington think tank, was more hopeful about a two-child policy. He said the policy change might even boost the national soccer team, which has underachieved on the international stage. “When there is only one child, parents are even afraid of allowing their only child to participate in sports,” said Dr. Zhang, who has studied China’s tightening labor market. “With two children, the worry will be much less.” [Source]
Read more on the family planning changes from Laurie Burkitt at The Wall Street Journal.
The promised abolition of re-education through labor, one of several labor camp systems currently active in China, has also been greeted with cautious enthusiasm as part of a “comprehensive makeover of the justice system.” From Henry Sanderson at Bloomberg:
“It’s open to huge abuses of human rights,” said Steve Tsang, director of the China Policy Institute at the University of Nottingham in England, of the current system. “Xi has reduced one of the major abuses of power which tarnished the party’s reputation and weakened popular support for the party.”
[…] “The key point that is motivating this is the recognition that the trust in legal institutions is essential for the party to maintain its leadership in the long-term,” [Human Rights Watch’s Nicholas] Bequelin said. “Every single legal reform point that is listed has to do with curbing the most visible and absurd defects of the system.”
[…] “It is significant even though there are some concerns that China may introduce shortly a new way of detaining people without giving them giving them full trial rights,” Bequelin said. “There is a risk that China intends to re-introduce a system of ‘RTL-lite’ soon, and that would be regrettable.” [Source]
See more from Bequelin (in French) and Human Rights Watch on the new reform announcements.
The promised legal changes also include a limited degree of increased judicial independence and transparency. From Angela Meng and Keith Zhai at South China Morning Post:
“[The party] will explore ways to establish a supervision system that properly separates regional government and the judiciary below the provincial level,” according to the party document. While the wording is vague, analysts believe that the party is moving toward interfering less in run-of-the-mill court cases.
The plenum document also said it would improve trial procedures by appointing presiding judges who would be held responsible for verdicts and sentences. Currently, cases are decided by committees of judges, which are usually under the control of the party’s local politics and law committees. The practice has long been blamed for the manipulation of court rulings and for breeding corruption.
[…] Such reforms still fall short of the long anticipated “vertical” management system, under which courts and prosecutors would no longer report to local governments but to superior levels. [Source]
Environmental issues are yet another area of intense public concern addressed by the newly announced reforms. From Wayne Ma and Brian Spegele at China Real Time:
In the economic and political roadmap released Friday, China said it wants to introduce a system that will lead to more compensation for environmental damage. The country will gradually introduce a tax for the use of almost every natural resource, and the fees are aimed at those who exploit, damage and pollute the country’s natural resources. Those who cause environmental damage may also be held “criminally responsible,” it said.
[…] The document references a need to develop environmental marketplaces, including pushing forward what it calls “carbon emissions rights.” The line appeared to be a nod that the government is considering how to expand pilot carbon-trading schemes, which some environmental scholars see as an important way to limit China’s carbon dioxide emissions, a contributor to climate change.
[…] The document said cadres may be forced to go through an outgoing audit of local natural resources, a move that would presumably help detect severe resource degradation during their tenure. Such a move, if enforced, could mark a small step in giving local officials a greater incentive to protect their environments. [Source]
There are other tightenings of control, however. At China Real Times, Paul Mozur focused on the document’s call for firmer Internet management:
Though officials have recently discussed the government’s opinions about the dangers social media poses to China, the explanation marks a rare high-level and unified statement about the party’s view of the Chinese Internet in recent years.
[…] Though the statement is short on any tangible steps the government will likely take to improve the system, one line from the reform blueprint points a specific problem the government will likely work to address. At one point the statement says China needs “a robust system to manage sudden occurrences on the Internet.” The use of “sudden occurrences” likely refers to the rapid spread of discussion of unpredictable events over social media. [Source]
Talk of a firmer grip on the Internet will add to anxieties about the announcement of a new, unified National Security Commission. From Ananth Krishnan at The Hindu:
The NSC, Mr. Xi said in the document, would address “two pressures” China is facing. “Internationally, the country needs to safeguard its sovereignty, security and development interests; domestically, political security and social stability should be ensured,” the President was quoted as saying in the document, by the official Xinhua news agency.
[…] Mr. Xi, in Friday’s document, described “State security and social stability” as “preconditions for reform and development.” On the domestic front, the commission will focus on both social stability and addressing security threats — an issue that has received prominence following last month’s attack in Tiananmen Square.
On the external front, Mr. Xi highlighted maintaining sovereignty as a specific challenge, indicating that the NSC may play a role in managing China’s many territorial disputes, whether with India on the west, over the South China Sea, or with Japan over the disputed Diaoyu or Senkaku islands in the East China Sea. [Source]
Some fear that the NSC will become a Chinese KGB; others believe it may more benignly rein in security forces to prevent them from obstructing reform in other spheres. A Foreign Ministry spokesman announced that the commission “should make terrorists, extremists and separatists nervous“, an ominous statement given authorities’ not invariably uncontroversial application of those labels. In any case, The New York Times’ Jane Perlez described the new body as both evidence of and a potent addition to Xi’s personal power:
The decision by Mr. Xi to push ahead with the national security committee drew special attention because although two of his predecessors, Jiang Zemin and Hu Jintao, had contemplated forming such a coordinating policy group, bureaucratic resistance, particularly from the military, had prevented its creation, the experts said.
[…] It seemed clear from the Chinese announcement that Mr. Xi would head the new Chinese agency and that his position at the helm would serve to increase his already firm grasp on power, said Zhao Kejin, an associate professor at Tsinghua University in Beijing, who is an expert on China’s diplomacy.
However the reforms are implemented, it seems unsurprisingly clear that any new relaxations are for the sake of the Party’s continued rule. From an editorial in The Financial Times:
[…] In essence, Mr Xi is hoping to address the many grievances of ordinary Chinese people to shore up support for continued one-party authoritarian rule.
[…] While insisting that China must create a more innovative society and economy, Mr Xi’s administration is also tightening control over the media, ideology and particularly the vibrant Chinese internet.
Whether these two contradictory goals – more innovation and more thought control – can be squared is questionable. Mr Xi must therefore hope that his incremental reforms can improve people’s lives enough to head off demands for more substantive political change. [Source]