The reforms are aimed at revitalising the world's second-largest economy amid deepening fears about a trend of rising corruption, wasteful investment and local government debt.
China is drawing up a blueprint for sweeping reforms aimed at averting an economic crisis, sources with close ties to the leadership say.
Liu He, who leads the party's Central Leading Group on Financial and Economic Affairs, has been given the task of preparing a seven-point blueprint for the Third Plenum of the 18th Communist Party Congress, which is due in about October, according to a source with close ties to several members of the Politburo Standing Committee.
A few points are worth noting. First, appointing Liu He to the task of creating a "reform plan" should generally be interpreted as a positive sign. Liu is no stranger to such herculean efforts, having been widely rumored as a leading architect of China's 12th Five-Year Plan, a blueprint that most observers laud as a formidable, if overly ambitious, plan to achieve China's economic transition. Second, the timing of the Third Plenum, if true, reaffirms previous speculation that the new leadership is hoping to imbue their reform rollout with historical import. As Evan Feigenbaum and I wrote recently in Foreign Affairs:
If Chinese leaders do choose the third plenum as the place to announce new reforms, it will be because it is pregnant with political symbolism: it was at another third plenum, in 1978, that Deng Xiaoping, the architect of China's market reforms, won consensus around the vision that set China on its course to becoming the world's second-largest economy.
Sometimes, history resonates with itself. In 1969, as the Communist Party was preparing for the Ninth Party Congress, Lin Biao put forward the view that the process of continuous revolution should be stopped, and the Party should turn its attention instead to ways to develop productivity. If Mao had been receptive to this idea, then maybe Lin Biao would have gone on to become the next Deng Xiaoping.
But the opposite occurred, because the suggestion angered Mao deeply, causing the rift between them. Fast forward to 1978, and the Third Plenum, where Deng Xiaoping thought the same thing, that the continuous process of revolution should be stopped, and that the whole Party should turn its attention to building a modern China. Luckily, Hua Guofeng wasn't Mao, and fortunately he accepted Deng's suggestion.Hua and Deng agreed ahead of the Third Plenum that it would look forwards rather than backwards and avoid getting tangled up in "problems left over by history." (By this, they meant that it wouldn't concern itself with debating the issue of all the trumped-up or mistaken political charges against people.) They decided that what was needed was "unity to face the future."