13 Nov 2013
Flash: Room to be concerned after Chinese plenum outcome - Rabobank
FXstreet.com (Barcelona) -The 3rd Chinese Party plenum saw a vague statement of intent to reform rather than including practical measures that had been on China-watchers’ wish-lists, notes Michael Every, Economist at Rabobank.
Key Quotes
"There was also no timetable for the implementation of any future steps beyond a final goal of 2020 (a parallel timeframe to that being suggested for roll-out of reforms from an the initial test-bed in the Shanghai Free Trade Zone)."
"There was one notable shift in rhetoric, with the role of markets in allocating resources to be “decisive”, against the “basic” role that they have officially been seen as holding up till now. That is potentially a major breakthrough, and the Party also stated it would tackle pollution, and increase judicial independence."
"However, we still don’t have any idea of if, how, or when we are going to see any of those changes implemented on the ground. Moreover, it appears there are no plans to roll back the overbearing influence of SOEs on the economy."
"Overall, given the highly imbalanced nature of present Chinese growth and the underlying deterioration in its debt position, there is room to be concerned, not enthused, at this plenum outcome."
Key Quotes
"There was also no timetable for the implementation of any future steps beyond a final goal of 2020 (a parallel timeframe to that being suggested for roll-out of reforms from an the initial test-bed in the Shanghai Free Trade Zone)."
"There was one notable shift in rhetoric, with the role of markets in allocating resources to be “decisive”, against the “basic” role that they have officially been seen as holding up till now. That is potentially a major breakthrough, and the Party also stated it would tackle pollution, and increase judicial independence."
"However, we still don’t have any idea of if, how, or when we are going to see any of those changes implemented on the ground. Moreover, it appears there are no plans to roll back the overbearing influence of SOEs on the economy."
"Overall, given the highly imbalanced nature of present Chinese growth and the underlying deterioration in its debt position, there is room to be concerned, not enthused, at this plenum outcome."