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14 Nov 2013
China leaders fail to give the reform plan a clear direction
FXstreet.com (Barcelona) - The Chinese government’s Third Plenum communiqué, released on Wednesday, disappointed with its vague and contradicting statements on the direction of China´s economic reforms, introduced by president Xi Jinping in his first policy move since being elected.
According to the document, the Communist Party would like to see a more “decisive” role of the free market, but at the same time they want to maintain "the leading role of the state-owned economy."
They called for more property rights for farmers and for making tax regulations and government spending policies more transparent, although without providing any clear solutions.
Michael Every, Head of Financial Markets Research, Asia Pacific at Rabobank comments: “Near-term, growth prospects remain excellent, and the outlook for the CNY is to continue to gain vs. the USD. However, the quality of the growth is steadily deteriorating.”
“Hopefully, Xi will move to consolidate power quickly, and by mid 2014 we will see concrete steps towards reforms. Given the failure of the US and Japan to deal with their structural economic problems – and Europe’s willingness to aggressively bite the wrong kind of policy bullet – we all need to hope that China will be able to match the grandiloquent rhetoric of its communiqué with equally powerful reforms.”
According to the document, the Communist Party would like to see a more “decisive” role of the free market, but at the same time they want to maintain "the leading role of the state-owned economy."
They called for more property rights for farmers and for making tax regulations and government spending policies more transparent, although without providing any clear solutions.
Michael Every, Head of Financial Markets Research, Asia Pacific at Rabobank comments: “Near-term, growth prospects remain excellent, and the outlook for the CNY is to continue to gain vs. the USD. However, the quality of the growth is steadily deteriorating.”
“Hopefully, Xi will move to consolidate power quickly, and by mid 2014 we will see concrete steps towards reforms. Given the failure of the US and Japan to deal with their structural economic problems – and Europe’s willingness to aggressively bite the wrong kind of policy bullet – we all need to hope that China will be able to match the grandiloquent rhetoric of its communiqué with equally powerful reforms.”