Though China’s leadership succession was completed earlier this year, the policy agenda for the coming decade has only just been revealed. Following Chinese political tradition, the country’s new leadership had to wait for the Third Plenum of the Chinese Communist Party’s 18th Central Committee – held 3-4 quarters after the First Plenum, where the succession was sealed – to unveil its economic-policy priorities.

[By Zhai Haijun/China.org.cn]

Third Plenums – and perhaps only Third Plenums – can bring about radical transformation. Indeed, it was at the Third Plenum of the CCP’s 11th Central Committee that Deng Xiaoping launched the reforms that opened up the Chinese economy and triggered more than three decades of rapid economic growth. The Third Plenums of the CCP’s 14th and 16th Central Committees – held in 1993 and 2003, respectively – also stand out. At both meetings, CCP leaders put forward comprehensive plans for the creation and perfection of the so-called “socialist market economy” in China.

The 60-point “resolution” produced at the most recent Third Plenum covers six areas: the economy, the political system, the environment, culture, society, and Party capacity-building. This represents a significant departure from the agendas produced at previous Third Plenums, which focused exclusively on economic reform.

But, when it comes to economic-reform objectives, the resolution is not overwhelmingly innovative. Indeed, most of the goals that it includes – like reform of state-owned enterprises (SOEs), development of private enterprise, reduction of government intervention, protection of property rights, and creation of a modern market system – can be found in the resolution of the Third Plenum of the CCP’s 16th Central Committee.

Even the decision to redefine the market’s role in resource allocation as “decisive” was not the breakthrough that many observers have claimed. After all, the 2003 resolution had already defined the market as “fundamental” to resource allocation. Given this, the latest resolution’s most important implication is that it has dispelled any doubt about the new leadership’s commitment to the market-oriented reform that Deng initiated in 1978.

In line with tradition, the Third Plenum’s resolution did not discuss problems concerning growth and development, which one hopes the government will address in greater detail in the near future. That said, some of the resolution’s specific provisions for economic reform represent much-needed progress.

SOEs will be required to deliver 30% of their profits to the state, instead of keeping most – or even all – of their profits, as they have done for the last two decades.