Where is China under its (relatively) new president Xi Jinping heading to politically and economically? That question is as open as ever and those analysts and observers who over the last two years sought to make predictions on Beijing’s preparedness to adopt economic and political reforms, have come to realize that China’s political and economic policymaking processes remain too opaque and non-transparent to make predictions which go beyond guess-work.
Viewed from the outside, after almost one year in office Xi has yet to display a clear vision pointing to further political reform (such as e.g. strengthening what the Communist Party typically refers to as ‘inner-party democracy’) and economic reform (such as policies favoring private entrepreneurship as opposed to focusing on providing the country’s gigantic of state-owned enterprises with cheap credit and subsidies). Economic and financial reforms in particular aimed at providing innovative and profitable private companies with credit are considered to be vital for achieving the transformation of China’s in the long-term unsustainable development and growth model.
The prospects for political reform under Xi allowing political forces and movements to operate outside the control of the Communist Party are not promising, to say the very least. The Party continues to protect what it refers to as the ‘Party’s monopoly of power’ and Xi will-at least so it seems-continue to defend that monopoly come what may.
While Xi already appears to be (very) serious about tackling China’s deeply embedded corruption on the regional and national levels, China’s foreign and security policies continue to remain as assertive as ever.
High politics aside, China will continue remain a fragile country, both politically and economically. The country is paying an enormously high price for its 30 year-long rapid economic development. China is home to 16 of the world’s most polluted cities and 80% of the country’s rivers are irreversibly contaminated. China’s banking system is probably much less stable and more burdened with non-performing loans than Beijing is willing to admit and despite some timid reforms, the country’s financial system and markets are still relatively closed and hence unattractive to foreign investors.
For the time being, however, Xi wants his Chinese compatriots to start dreaming what he calls the ‘Chinese Dream’ while promising to fill in some of the blanks on the nature and outcome of that dream at the upcoming 3rd Plenary Session of the 18th CPC Party Central Committee.