HUI FENG |

While the 19th party congress confirmed President Xi Jinping’s grip of power at the top echelon of the political system, the newly minted leadership team faces difficult decisions on both the finance and economic fronts. In his keynote report to the Congress, Xi reiterated his intention of ‘pushing through supply-side structural reforms’ and reaffirming his belief that China should ‘[l]et the market play a decisive role in resource allocation’. Both of these goals have been enshrined in the Party’s charter, but the Party’s track record in implementing such necessary reforms has not been impressive. In recent years, Beijing has tightened political control of not just the state-owned enterprises (SOEs) but also private enterprises; partially reversed liberalisation efforts in fostering capital flows, and forced the private sector to deleverage while turning a blind eye to the ever bulging SOE debt.

In the coming years, both Xi and the party-state will continue to tighten control over the economy and society. To Xi, unfettered liberalisation also comes with significant side effects, namely economic and social polarisation, financial risks, and environmental degradation. Therefore, it is a political imperative to have the government and the SOEs play a stronger role in addressing China’s ‘unbalanced and inadequate development’. The two keywords for the new leadership will undoubtedly be stability and redistribution.


Please click here to read the full “Achieving the China dream or facing a minsky moment: China after the 19th party congress” article in the China Policy Institute: Analysis by Griffith Asia Institute Research Fellow, Dr Hui Feng.