Those looking for major political and economic reforms in China are likely to be disappointed.
During his opening speech at the 18th National Congress, Hu Jintao, outgoing president and leader of the Communist Party, made it very clear that China will “never copy a Western political system”.
But Societe Generale’s Wei Yao finds that Chinese policymakers certainly spoke of reforms way more than they had in the past.
This chart tracks Chinese leaders use of the words “people’s well-being” and “institution reforms” from the 14th Congress in 1992, to the 18th Congress today:
[credit provider=”Societe Generale”]
And Yao writes that certain economic reforms were given more attention than before:
“Policies regarding social welfare, including education, employment, social security and healthcare, are also given a higher priority.”
Yao points out that a household income target was mentioned for the first time, a point we made last week as well. And that the use of ‘institutional reforms’ also surged:
“Institutional reforms,‛ which cover both political and economic aspects, was another high-frequency phrase. Under the section on economic policies, to broaden and deepen economic reforms‛ is moved to the No.1 sub section from the sixth in the 17th Party Congress report.
Furthermore, the first sentence in this sub section is that the core of economic reforms is to balance the relationship between the state and the market and to let the market mechanism play its role.”
Yao is of the opinion that Beijing’s goal of doubling per capita income by 2020 is achievable if a “genuine economic rebalancing occurs” and that Beijing is right to say it wants to reduce the role of state owned enterprises in areas of the economy where the private sector should have been given more freedom.
Yet it will come as a disappointment to investors hoping for change, that the Communist Party’s Central Committee elected a conservative Politburo Standing Committee – China’s all important decision making body. For now we have to watch and see if Beijing is really ready for change.