China Dashboard: Is China committed to the economic reform program?

(This is an excerpt from my note to the Asia Society Australia Board, Advisory Council and Members)

19th Chinese Communist Party's Congress marked a seminal moment in China’s rise story. The jury is out if the Congress is a true beginning of 中国世纪 (China century) or the moment when China lost its growth and opening-up momentum.

At the heart of the debate is the question of economy. Can China effectively pursue a political tightening and consolidation led by President Xi Jinping, while implementing an ambitious reform agenda of the Party’s 2013 blueprint?

Kevin Rudd, Asia Society Policy Institute President at Asia Society Australia members briefing last week said that despite many obstacles along the way, China’s track record of the last four decades in reinventing its economy while strengthening its political system suggests that it can. Expanding his theses in the Project Syndicate essay, Rudd says: “Still, for the last 40 years, China has implemented a national strategy that, despite its many twists and turns, has produced the economic and political phenomenon that we see today. It would be reckless to assume, as many still do in the US, Europe, and elsewhere, that China’s transition to global preeminence will somehow simply implode under the weight of the political and economic contradictions they believe to be inherent to the Chinese model”.

Dr Geoff Raby, former Australian Ambassador to China and a member of Asia Society Australia disagrees. Writing in the AFR, he believes that as a result of the “usurpation” of power in Xi’s hands and the departure from the established practice of ‘collective leadership’ in the Chinese system, China may lose its capacity for effective decision-making necessary to implement the economic reform agenda. As an example, Dr Raby also points out to the unsatisfactory progress of the State Owned Enterprises (SOE) reform under Xi’s rule.

The direction of China’s economic reform is of paramount importance to Australia and over 100 other nations which count China as the largest trading partner. As Australia debates China’s political and foreign policy shifts and the intent and manifestations of Chinese power, including here in Australia, the economic relationship between our nations remain a success story and a dominant positive factor of the bilateral relationship.

DFAT Secretary and Asia Society Australia Advisory Councillor Frances Adamson in her two important speeches on China emphasised the breadth and depth of the relationship, and a long-standing Australian policy of having “a robust framework to acknowledge our differences, discuss one another’s concerns, and pursue our mutual interests”.

Economic ties and Australia’s full-hearted support of China’s economic opening-up have been major contributors of good will in the bilateral relationship.

But if under Xi China’s economic reform agenda falters, will the scales of agreements and disagreements in our relationship tilt towards the latter?

This is the question that we at Asia Society globally and in Australia will be focussing on in our programming and thought-leadership.

China Dashboard

It is in the context, Asia Society launches today the China Dashboard: Tracking China’s Economic Reform Program a new interactive online project by the Asia Society Policy Institute and the Rhodium Group to track China’s progress toward its self-defined reform objectives, announced in 2013.

To build a shared reference point for China’s economic reform progress, The China Dashboard provides a set of independently developed resources updated quarterly:

·      A net assessment of progress across 10 key Chinese economic reform priorities

·      Fiscal affairs, financial system, trade, cross-border investment, innovation, competition, state-owned enterprise, environment, labor, and land

·      Detailed individual assessments of each policy reform cluster, including a primary indicator, summary assessment, data analysis, and policy review.

·      Clear methodology notes explaining the choices behind each indicator.

China’s economic performance under Xi will also be a topic of our briefing of our Forecast Asia briefing for members with Dr Paul Gruenwald, Managing Director and Chief Economist (Asia-Pacific), S&P Global on 22 November in Sydney.

Philipp Ivanov

CEO, Asia Society Australia