China: Third Plenum meeting – THE CHANGE

Posted: November 6, 2013 in Uncategorized
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The 9th November there will be the Third Plenum Meeting.

The outcomes of this meeting will define China for the next 10 years at least.

Going back in history,  China as we know it is a product of Chairman Deng that, in 1978, 2 years after the death of Mao, took the reign of China and steered it in the current direction.

Most of the readers will not know, but China is 1978 looked like on the brink of collapse.

Then Deng made a series of reforms, accelerated after Tienanmen in the late 1990 that gave us China as we know it.

Now a series of issues (One Child Policy consequences, bureaucracy, nepotism, bribery, high wages, criticism of the Party, rise of the internet, lack of consumer confidence) will be addressed by Xi, but they do present formidable challenges.

President Xi will have to change the relationship between the Party and the citizen.

-He will try to strengthen his position as President of the Party

-He will try and decrease the levels of bureaucracy and interference in the economy

-He will try to free the financial markets (currency and allowing foreign investments in China and from China to the international share markets

-He will try to make the economy more market competitive

-He will try and create a more nimble Government

As you can see these reforms will not be easy and there is no assurance it will be a smooth transition.

But the outcome of the transition will be fundamental, for China, the entire world and in particular Australia.

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