Int'l community should be patient with, confident in China's reform

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Int'l community should be patient with, confident in China's reform

(Xinhua) 08:19, November 15, 2013

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BEIJING, Nov. 14 (Xinhua) -- The communique released by the Communist Party of China (CPC) has initiated a wide-ranging discussion in the international community, reflecting the importance and influence of China's economy around the world.

The international community, however, should be patient with and confident in China's reform blueprint, which will take time to roll out concrete measures.

To understand correctly reform signals released by the communique, two wrong tendencies should be avoided: first, hoping that all problems will be solved at the Third Plenary Session of the 18th CPC Central Committee; second, loosing confidence in China's reform before getting comprehensive information.

Prior to the session, overseas analysts had focused generally on finance, land acquisition, the household registration system (hukou), state-owned enterprises, the fiscal and tax system, and hoped the plenum could bring out concrete measures and actions.

However, the communique barely touched finance and hukou, where analysts cannot help guessing and doubting China's reform.

Actually, expectations for complete and specific reform details should not stay too high since the key meeting normally deliver only guidelines.

Financial Times, citing analysts, said on its website that "the lack of detail should not be seen as a disappointment."

Nicholas Lardy, a senior fellow at the Washington-based Peterson Institute for International Economics, said that the communique made clear the direction of the reforms, but the programs needed to be filled out by more detailed policies later on.

In fact, many overseas media and analysts have become aware of that and started to shift their attention to the "The Decision of the CPC Central Committee on Several Important Issues of Comprehensively Deepening Reform."

David Dollar, senior fellow with the John L. Thornton China Center at the Brookings Institution said that the document shows "an intention on the part of the new leadership to accelerate reform."

Certain areas, such as hukou, land rights and financial reforms were barely mentioned, but reform measures in those areas would hopefully emerge in the future, he said.

Though overseas reactions to the communique are mixed, the overall tone stays optimistic.

The communique is encouraging for its hard push on reforms, said Stephen Roach, senior fellow at Yale University's Institute of Global Affairs and former chairman of Morgan Stanley Asia.

The document highlighted the market's "decisive" role in resource allocation, which will guide China's economic development in the future, analysts said.

The world should have confidence in China's economic prospect and also stay patient with its economic reform since an overhaul plan cannot be put into place overnight.

There would be other changes in the global economic landscape in the next three to five years, and China would be a big part of the global rebalancing, during which the developed countries and emerging nations are likely to wrestle for economic leadership, said a a senior strategist at United Bank of Switzerland (UBS).

The timing of the plenum is appropriate since China's decision-makers should cautiously consider the global economic pattern and make long-term plans for China's economic restructuring, said Edward Bang, Asia and Pacific head strategist of Global Investment Solutions at UBS Global Asset Management.