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IN November 2013， the Third Plenary Session of the 18th Central Committee of the Communist Party of China （CPC） approved “a decision on major issues concerning comprehensive and far-reaching reforms，” and concluded the meeting with a communiqué revealing China’s long-term goals.
On recent trips to South Korea， Europe and Latin America， I met people who all touched upon the topic of the third plenum in our conversations， interested in what new decisions would be made in China. In Beijing， foreign friends from the U.S. and Australia also tried to get a line on how the third plenum would impact on China’s future development. It’s unprecedented for a CPC Central Committee plenum to attract so much world attention， but also inevitable.
After 30-plus years of development since the implementation of its reform and opening-up policies， China has developed into the second largest economy in the world and become a major player in the international arena. There is no doubt that key events happening in China influence the world.
The world’s increasing interest in China has something to do with the sluggish economic recovery following the global financial crisis. The aftermath of the crisis that broke out in 2008 still lingers， and Europe is mired in it； it’s quite possible that the Eurozone will still show negative growth in 2013， and witness an increase rate of just one percent in 2014. Although economic recovery in the U.S. is under way， its momentum is not dynamic； it’s expected that U.S. economic growth will be at a rate of 1.6 percent in 2013 and 2.6 percent in 2014. Due to this lackluster global recovery， the world is seeing growing unemployment figures， with a total of about 200 million unemployed people at present. Economic growth is the key to improving the situation and today， the engine driving this growth is East Asia， in particular， China.
It can even be said that big changes happening in the world today are triggered by events in China. In the 170-plus years since the Opium War of 1840， time had witnessed a passive and limp performance by China on the world stage. However， today things have changed： Not only are we a recipient of world influence， but an actor with increasingly powerful influence on the world. This is unprecedented.
In brief， that all eyes are on the outcome of the third plenum of the 18th CPC Central Committee is a direct result of the interplay between world changes and China’s development. Aside from world attention， the Chinese public has also had high expectations concerning the key CPC meeting. Observers have commented that this meeting rivals in historic importance the Third Plenum of the 11th CPC Central Committee in late 1978. That meeting was particularly significant because it adjusted China’s development path and shifted the CPC work focus to economic development， and this strategic decision brought about considerable changes to China. Like the plenum in late 1978， this year’s meeting sets China on the cusp of a turning point. Since the 18th CPC National Congress in November 2012， the new central leadership with Xi Jinping as the General Secretary has taken over the mission to lead the country and make headway in its development in a new era. The major decisions made at the recent plenum will guide China’s development in the next decade. Living up to the high expectations of the general public， the meeting produced fruitful results and mapped out the blueprint for China’s development.
The plan is to comprehensively， not partially， deepen reform in a wide range of fields such as poli- tics， economy， culture， society， ecology， defense and Party building. China’s development is entering a new stage where reform in one sector will certainly influence others. China’s reform has advanced into“deep waters” and to keep it afloat， China must break the mold， which will surely trigger resistance and interference from vested interest groups. Only comprehensive reform can create a momentum powerful enough to break down the current set interest pattern and further China’s development by overcoming various barriers.
Such comprehensive measures will take economic restructuring as a focus and a breakthrough point. Since late 1978， the CPC has considered economic development as its central task and promoted the overall policy through reorganizing the economic sector. The report of the 14th CPC National Congress clarified for the first time China’s reform goal to establish a socialist market economy. It also stressed that the market should play a basic role in the allocation of resources， which had a positive influence in pushing forward China’s economic reform. The recent plenum proposed that China should deepen its reform on the economic system， wherein the market no longer plays a “basic role” but the “decisive role”in the allocation of resources. This is a great change， since the core of economic restructuring is to properly handle the relationship between the market and the government.
Reviewing the course of its past 30-plus-year reform， it is clear China’s progress has been remarkable. However， also noteworthy is that the government has done many things that it should have left to the market. In essence， governmental interference goes against the rule of a market economy. So， the current emphasis on “letting the market play the decisive role in the allocation of resources” implies that the government has decided to stop interfering in what it shouldn’t and leave the market to play its part. In line with this new trend， the plenum also clarified the government’s functions， forbidding it to act beyond its authority. Since the new government leadership took office last March， Premier Li Keqiang has emphasized on several occasions streamlining administration and introducing decentralization， and that the market should have greater responsibility. This signals that upcoming major reforms in China will be market-oriented， which will ensure China’s economic development better conforms to the market rule.
The core of “Deng Xiaoping Theory，” which has served as the CPC’s major policy guide since 1978， is about emancipating the productive forces. China’s impressive development in the past 30-plus years is a result of China constantly doing so. The plenum stressed the emancipation of people’s minds and productive forces and unleashing social vitality， which is imperative because only if China’s productive forces are fully free can China’s economy achieve better development.
Of the three elements of productive forces， namely， the people， the means of production and the subject of labor， the people is that most critical. In the past， our understanding of “people” had been one-sided； we had taken “people” to mean workers. In fact， here， “people” refers to entrepreneurs and inventors. Since China’s reform and opening-up， generations of such people have emerged and created huge social wealth and employment opportunities.
In 1978 China had no private economy. Today， however， the country’s private economy accounts for 65 percent of its economic aggregate and creates almost 80 percent of China’s jobs. However， excessive governmental interference in the development of China’s private sector has hampered the allimportant sense of initiative. But this year’s reform measures introduced by the third plenum， aiming to emancipate people’s minds and productive forces and unleash social vitality， are bound to stimulate people’s enthusiasm in developing the economy， bringing new advancement and development. The plenum has attached special importance to opening-up， which is also critically important for China’s development. On November 2， 2013 when meeting with representatives of the 21st Century Council， a top global think tank， President Xi Jinping said， “The more developed China becomes， the more important opening-up is for China.” China’s major development in the past three decades has been mainly achieved through opening-up and international cooperation instead of isolation. Deng Xiaoping masterminded the strategies of reform and opening-up， which have enabled the country to shake off poverty and build the world’s second largest economy. China had led the world for more than 1，000 years. When the Eight Power Allied Force invaded in 1900， China’s Gross Domestic Product （GDP） was almost one third of the world GDP. However， high GDP didn’t necessarily equate to a powerful country. Failure in technological advances put the country in an awkward position； seclusion led to China’s lack of progress， while opening-up brought about dynamic development. It is， therefore， widely held that without opening-up， there would be no reform and thus， no development in China.
What is noteworthy is that 42 days ahead of the third plenum， the Shanghai Free Trade Zone was officially launched， a signal to the world that China’s economy will be more open in the new era because opening-up can enable us to better learn from world civilization， better integrate with the world and better solve all kinds of conundrums facing us.
Detailed reform measures on various other fields will be introduced in succession. China’s experience indicates that reform must be carried out in a gradual and orderly manner – “shock therapy” is not a feasible option. Considering its huge population， immense territory and impressive economic aggregate， major reform measures should be introduced gradually and trials are essential. Once a trial reform sees success， the relevant experience can be promoted nationwide. China needs to be both bold and prudent. Only in this way can China advance steadily and realize rejuvenation of the Chinese nation and Chinese civilization.
On recent trips to South Korea， Europe and Latin America， I met people who all touched upon the topic of the third plenum in our conversations， interested in what new decisions would be made in China. In Beijing， foreign friends from the U.S. and Australia also tried to get a line on how the third plenum would impact on China’s future development. It’s unprecedented for a CPC Central Committee plenum to attract so much world attention， but also inevitable.
After 30-plus years of development since the implementation of its reform and opening-up policies， China has developed into the second largest economy in the world and become a major player in the international arena. There is no doubt that key events happening in China influence the world.
The world’s increasing interest in China has something to do with the sluggish economic recovery following the global financial crisis. The aftermath of the crisis that broke out in 2008 still lingers， and Europe is mired in it； it’s quite possible that the Eurozone will still show negative growth in 2013， and witness an increase rate of just one percent in 2014. Although economic recovery in the U.S. is under way， its momentum is not dynamic； it’s expected that U.S. economic growth will be at a rate of 1.6 percent in 2013 and 2.6 percent in 2014. Due to this lackluster global recovery， the world is seeing growing unemployment figures， with a total of about 200 million unemployed people at present. Economic growth is the key to improving the situation and today， the engine driving this growth is East Asia， in particular， China.
It can even be said that big changes happening in the world today are triggered by events in China. In the 170-plus years since the Opium War of 1840， time had witnessed a passive and limp performance by China on the world stage. However， today things have changed： Not only are we a recipient of world influence， but an actor with increasingly powerful influence on the world. This is unprecedented.
In brief， that all eyes are on the outcome of the third plenum of the 18th CPC Central Committee is a direct result of the interplay between world changes and China’s development. Aside from world attention， the Chinese public has also had high expectations concerning the key CPC meeting. Observers have commented that this meeting rivals in historic importance the Third Plenum of the 11th CPC Central Committee in late 1978. That meeting was particularly significant because it adjusted China’s development path and shifted the CPC work focus to economic development， and this strategic decision brought about considerable changes to China. Like the plenum in late 1978， this year’s meeting sets China on the cusp of a turning point. Since the 18th CPC National Congress in November 2012， the new central leadership with Xi Jinping as the General Secretary has taken over the mission to lead the country and make headway in its development in a new era. The major decisions made at the recent plenum will guide China’s development in the next decade. Living up to the high expectations of the general public， the meeting produced fruitful results and mapped out the blueprint for China’s development.
The plan is to comprehensively， not partially， deepen reform in a wide range of fields such as poli- tics， economy， culture， society， ecology， defense and Party building. China’s development is entering a new stage where reform in one sector will certainly influence others. China’s reform has advanced into“deep waters” and to keep it afloat， China must break the mold， which will surely trigger resistance and interference from vested interest groups. Only comprehensive reform can create a momentum powerful enough to break down the current set interest pattern and further China’s development by overcoming various barriers.
Such comprehensive measures will take economic restructuring as a focus and a breakthrough point. Since late 1978， the CPC has considered economic development as its central task and promoted the overall policy through reorganizing the economic sector. The report of the 14th CPC National Congress clarified for the first time China’s reform goal to establish a socialist market economy. It also stressed that the market should play a basic role in the allocation of resources， which had a positive influence in pushing forward China’s economic reform. The recent plenum proposed that China should deepen its reform on the economic system， wherein the market no longer plays a “basic role” but the “decisive role”in the allocation of resources. This is a great change， since the core of economic restructuring is to properly handle the relationship between the market and the government.
Reviewing the course of its past 30-plus-year reform， it is clear China’s progress has been remarkable. However， also noteworthy is that the government has done many things that it should have left to the market. In essence， governmental interference goes against the rule of a market economy. So， the current emphasis on “letting the market play the decisive role in the allocation of resources” implies that the government has decided to stop interfering in what it shouldn’t and leave the market to play its part. In line with this new trend， the plenum also clarified the government’s functions， forbidding it to act beyond its authority. Since the new government leadership took office last March， Premier Li Keqiang has emphasized on several occasions streamlining administration and introducing decentralization， and that the market should have greater responsibility. This signals that upcoming major reforms in China will be market-oriented， which will ensure China’s economic development better conforms to the market rule.
The core of “Deng Xiaoping Theory，” which has served as the CPC’s major policy guide since 1978， is about emancipating the productive forces. China’s impressive development in the past 30-plus years is a result of China constantly doing so. The plenum stressed the emancipation of people’s minds and productive forces and unleashing social vitality， which is imperative because only if China’s productive forces are fully free can China’s economy achieve better development.
Of the three elements of productive forces， namely， the people， the means of production and the subject of labor， the people is that most critical. In the past， our understanding of “people” had been one-sided； we had taken “people” to mean workers. In fact， here， “people” refers to entrepreneurs and inventors. Since China’s reform and opening-up， generations of such people have emerged and created huge social wealth and employment opportunities.
In 1978 China had no private economy. Today， however， the country’s private economy accounts for 65 percent of its economic aggregate and creates almost 80 percent of China’s jobs. However， excessive governmental interference in the development of China’s private sector has hampered the allimportant sense of initiative. But this year’s reform measures introduced by the third plenum， aiming to emancipate people’s minds and productive forces and unleash social vitality， are bound to stimulate people’s enthusiasm in developing the economy， bringing new advancement and development. The plenum has attached special importance to opening-up， which is also critically important for China’s development. On November 2， 2013 when meeting with representatives of the 21st Century Council， a top global think tank， President Xi Jinping said， “The more developed China becomes， the more important opening-up is for China.” China’s major development in the past three decades has been mainly achieved through opening-up and international cooperation instead of isolation. Deng Xiaoping masterminded the strategies of reform and opening-up， which have enabled the country to shake off poverty and build the world’s second largest economy. China had led the world for more than 1，000 years. When the Eight Power Allied Force invaded in 1900， China’s Gross Domestic Product （GDP） was almost one third of the world GDP. However， high GDP didn’t necessarily equate to a powerful country. Failure in technological advances put the country in an awkward position； seclusion led to China’s lack of progress， while opening-up brought about dynamic development. It is， therefore， widely held that without opening-up， there would be no reform and thus， no development in China.
What is noteworthy is that 42 days ahead of the third plenum， the Shanghai Free Trade Zone was officially launched， a signal to the world that China’s economy will be more open in the new era because opening-up can enable us to better learn from world civilization， better integrate with the world and better solve all kinds of conundrums facing us.
Detailed reform measures on various other fields will be introduced in succession. China’s experience indicates that reform must be carried out in a gradual and orderly manner – “shock therapy” is not a feasible option. Considering its huge population， immense territory and impressive economic aggregate， major reform measures should be introduced gradually and trials are essential. Once a trial reform sees success， the relevant experience can be promoted nationwide. China needs to be both bold and prudent. Only in this way can China advance steadily and realize rejuvenation of the Chinese nation and Chinese civilization.