Political announcements signal a greater role for the market in China

President Xi Jinping's comments at the conclusion of the third plenum of the party’s 18th Central Committee signalled greater interest in protecting the private sector - but many risks still remain.

A "deepening" role for the market was proclaimed by China’s ruling elite as it concluded the third plenum of the party’s 18th Central Committee. While the final statement predictably lacked specificity, it reinforced the reformist agenda of President Xi Jinping and signalled a gradual diminution of state control of all aspects of the economy in favour market influenced prices.

The importance of the plenum was always about the message it would send about momentum in the reform agenda and the ability of the new leadership to overcome resistance to reform. Beginning with an anti-corruption campaign that effectively discredited political opponents, most notably Bo Xilai, and generated popular support, the government has progressed reforms in foreign direct investment policy and interest rate deregulation. It has also had the confidence to permit an economic slowdown. The board pronouncements from the plenum indicate that this momentum will be sustained.

The report signals the development of a more balanced policy towards the public and private sectors; the maintenance of government to commitment to state owned enterprises combined with the development of "fair, open and transparent" market rules for the economy.

Exceeding expectations, the texts from the plenum show the government understands that systemic reform is a pre-requisite for making China’s economic system more sustainable. Judicial structural reform is called for along with changes to the Party’s internal oversight processes, thereby enhancing the role of central Party authorities. Enhancing the power of the judiciary’s at local levels could provide the government with a more effective mechanism to address corruption and force local implementation of policy directives, which would be positive for reform in the medium to long term.

Impediments posed by the two-tier land ownership system and the concept of equal land rights were also raised. At present, farmers moving to urban areas are unable to sell their land, in contrast to urban dwellers who are able to buy and sell property. It is anticipated that the distinction between urban and rural land will be abolished, a significant reform, that will take China a step further towards an economy driven by market forces.

While businesses can take many positives from pledges, albeit ambiguous, to protect the private economy, the crucial issues of interest rates, the floating of the renminbi or banking sector reform, were not publicly mentioned. This shouldn’t be interpreted as a sign that no action will be taken; rather that the government is leaving itself significant room for manoeuvre to implement policy reform in accordance with political and economic necessity.

While the pledge of greater protection for the private sector is a positive announcement from the leaders of the world’s second largest economy, many risks remain inherent in transacting business in country that lacks an independent judiciary and vibrant civil society.

Chinese President Xi Jinping in Beijing. Photograph: Getty Images.

JLT Head of Credit & Political Risk Advisory

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Does the UK care enough about climate change to admit it is part of the problem?

The government’s energy policies make can make it hard to decipher its commitment to emissions reduction.

“People tell me it’s ridiculous to be flying for a climate change project but you have to get real with it, I mean I can’t cycle across the Southern ocean,” says Daniel Price, an environmental scientist from London. As founder of Pole-to-Paris, Price is about to complete a 17,000km bike ride from the Antarctic to the Arc de Triomphe.

Price came up with the idea in an effort to raise public awareness of COP21, the UN Climate Change Conference taking place in Paris next week. During the trip he’s faced a succession of set-backs: from the discovery that boats were prohibitively expensive, to diplomatic tensions scuppering his Russian visa plans. Yet the darkest moments were when he became overwhelmed by the magnitude of his own mission. “There were difficult times when I just thought, ‘What is the point of this’?” he says. “Cycling round the world is nowhere near enough to engage people.” 

As world leaders descend on Paris, many questions remain unanswered. Not least how much support developing nations will receive in tackling the effects of climate change. New research commissioned by Oxfam claims that such costs could rise to £1.7tn a year by 2050. But with cuts kicking in at home, the need to deliver “climate justice” abroad feels like a bigger ask than ever.

So does Britain really care enough about climate change to accept its full part in this burden? The government’s energy policies make can make it hard to decipher its commitment to emissions reduction. In September, however, it did pledge £5.8bn from the foreign aid fund to helping poorer nations combat climate change (twice that promised by China and the United States). And there’s evidence to suggest that we, as a public, may also care more than we think.

In America attitudes are much darker; in the dismissive words of Donald Trump “It’s called the weather”. Not least since, as a recent study proves, over the last twenty years corporations have systematically spread scepticism about the science. “The contrarian efforts have been so effective," says the author Justin Farrell, a Yale sociologist, "that they have made it difficult for ordinary Americans to even know who to trust.” 

And what about in China, the earth's biggest polluter? Single-party rule and the resulting lack of public discussion would seem to be favouring action on the environment. The government has recently promised to reach "peak" emissions by 2030, to quadruple solar installations, and to commit $3.1bn to help low-income countries adapt to the changing world. Christiana Figueres, the UN’s chief climate official, has even lauded the country for taking “undisputed leadership” on climate change mitigation.

Yet this surge of policy could mask the most troubling reality of all: that, when it comes to climate change, the Chinese are the least concerned citizenship in the world. Only 18 per cent of Chinese see the issue as a very serious problem, down 23 percentage points from five years ago, and 36 points behind the global median.

A new study by political economist Dr Alex Lo has concluded that the country’s reduced political debate could be to blame for the lack of concern. “In China popular environmentalism is biased towards immediate environmental threats”, such as desertification and pollution, Lo writes, “giving little impetus to a morally driven climate change movement”.

For the international community, all is well and good as long as the Chinese government continues along its current trajectory. But without an engaged public to hold it to account there’s always a chance its promises may fade into thin air.

So perhaps the UK’s tendency to moan about how hard it is to care about the (seemingly) remote impacts of climate change isn’t all bad. At least we know it is something worth moaning about. And perhaps we care more than we let on to each other.

Statistics published this summer by the Department of Energy and Climate Change reveal that three quarters of the British public support subsidies for renewable energy, despite only 10 per cent thinking that the figure is that high. “Even if the public think the consensus is not there, there are encouraging signs that it is,” says Liz Callegari, Head of Campaigns at WWF. “Concern for climate change is growing.”

As Price puts it, “You can think of climate change as this kind of marathon effort that we have to address and in Paris we just have to get people walking across the start line together”. Maybe then we will all be ready to run.

India Bourke is the New Statesman's editorial assistant.