China’s crucial Shanghai trade
At its Third Plenum, the Communist Party communicated its commitment to economic change. The country’s first free trade zone, in Shanghai, will act as the test bed, but without clarity on any number of policies, will international firms rush to set up shop?
It was a small line in a long paper. But to Shanghai’s Free-Trade Zone – and possibly to China as a whole – it was a sentence loaded with importance.
Although lacking in specific detail, the communiqué of the Third Plenum of the 18th Communist Party, published on November 12 after four days of intense discussion, demonstrates Beijing’s dedication to pursuing reform in a variety of areas, not just in the economy.
China’s new leaders, Li Keqiang, China’s premier, and Xi Jinping, the general secretary of the CPC, mention tax reform, land reform, green innovation and even cultural development as focuses to be addressed. China also aims to deepen reform of the judicial system. The emphasis on social justice hints that Beijing might soon revise its outdated and discriminatory registration system, known as Hukou, whereby stringent laws prevent rural migrant workers from seeking social benefits in the cities.
"The Third Plenum might not be all that explicit at the moment, but does highlight the direction of current party ideology and commitment of Beijing to these goals," says a senior executive at an international bank based in Shanghai. "At the Third Plenum the government actually put the interests of citizens before economic reform – for the first time in Chinese history.