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CPC central committee to give reforms boost
(Business Weekly)
Updated: 2004-09-26 08:09

With the convening of the Fourth Plenary Session of the 16th Central Committee of the Communist Party of China (CPC), China's market-oriented reforms are expected to receive new momentum to sail forward, analysts said.

"The event did not discuss economic policies directly and in details, but its main theme "strengthening the Party's ruling capability" is expected to make the operation of the market more smooth and reduce government interference in market operations," Liang Peng, a professor of economics at the Central Party School, told China Business Weekly.

Faculties of the Central Party School are the main think-tank of the CPC's highest policy-making body, the Standing Committee of the Political Bureau.

The Fourth Plenum was convened between September 16 and 19 in Beijing. According to a report from the Xinhua News Agency, during the four-day plenum, the CPC Central Committee heard a work report of the Party's Political Bureau while discussing issues concerning the improvement of the Party's governing capability.

It is the first time for a CPC Central Committee plenum to put the building of the Party's ruling capability on top of the agenda.

Ye Duchu, a prominent professor of Party building at the Central Party School, said the convening of the plenum is at a key point in the nation's economic and social development.

Years of fast economic growth have lifted China's per capita gross domestic product (GDP) to US$1,000, but it has also led to many contradictions and created diversified social strata and interest groups.

How to govern the more complicated society and co-ordinate the interests of different sides has become quite a challenge, Ye told China Business Weekly.

The Fourth Plenum followed six key documents and regulations on official enrollment and official supervision released by the CPC since early this year, including Regulations on Inner-Party Supervision of the CPC (trial version); Regulations on Disciplinary Punishments of the CPC; and Provisional Regulations on the Open Selection of Leading Officials of the Party and Government.

The documents have widely been considered as an attempt by CPC to establish institutional leadership, increasing inner-Party democracy as well as curbing abuses of power.

CPC General Secretary Hu Jintao said last Wednesday, at a rally to mark the 50th anniversary of the founding of the National People's Congress, that history proves that blindly following Western political systems would lead China into a dead end.

"While rejecting Western political systems, the Party must try to solve the high power concentration and the corruption, as well as the issue to select capable leaders at different levels," Ye said.

In the process of China's economic transformation, this power concentration can help some corrupt officials obtain huge profits through wielding their powers, Ye added.

Beijing-based analysts say making the representatives of the Party's congresses at different levels become standing members, so that they can supervise the Party's committees at the same level, is a key result of the Fourth Plenum.

So far, representatives of the Party's congresses only gather once every five years mainly to discuss and approve leadership transitions at the same level. The system has in fact made the Party's congress lose its daily supervisory role over Party leaders, Ye said.

The plenum may have also reached more consensus among top Party leaders on how to expand the competitive selection of Party committee leaders at different levels.

There are 198 members of the Party's Central Committee, including members of the Political Bureau and its Standing Committee the heart of power -and most ministers and provincial governors.

In terms of the economy, the plenum has very important implications, Liang said.

"The strengthening of the ruling capability has two aspects: Improving Party leaders's capabilities, including the ability to co-ordinate the interests of different social groups, and gradually changing the mechanism of decision-making from the original top-to-bottom to bottom-to-top," Liang said.

Liang said that currently in China, many Party leaders's goals are often single-tiered and they lack the incentive to co-ordinate interests of various social groups. For example, during the ongoing macroeconomic adjustment that began earlier this year, many local leaders have ordered the end of the construction of privately invested factories to lower the growth rate of fixed asset investment - a major goal of the macroeconomic adjustment policy. Commercial banks also abruptly cut loans to many private factories.

The growth rate of fixed asset investment has fallen from 43 per cent in the first quarter to 30.3 per cent through the first eight months of this year, but meanwhile, the private sector is seriously hit.

According to the regular survey of the National Bureau of Statistics, the confidence index of private entrepreneurs in the second quarter this year was 14.1 per cent less than the first quarter, falling below 130 points. The quarterly decline was the biggest in the past five years.

Improving the Party's ruling capability does not mean its leaders will become wiser. Rather, it means there will be institutional mechanisms to make sure Party leaders consider and serve the interests of the people, including private investors, Liang said.

There are also rumours that the plenum discussed raising China's interest rate.

But both Liang and Ye dismissed the possibility.

"Improving ruling capability requires the Party to honour market practice, and the central bank's independent role of setting interest rate policies should be respected by Party leaders," Liang said.

Xie Chuntao, a professor at the Central Party School, said that news reports about the plenum indicate that the Party leadership has become more transparent.

Before the 16th CPC Central Committee, there was only a brief news ahead of the plenum reporting a plenary meeting would be convened. But before this Third and Fourth Plenum, many more reports telling concrete topics of the upcoming plenum can be found.

"The greater transparency can help promote the democratization of our economic decision-making process," Liang said.

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