China Pathfinder: Will sluggish growth trigger green shoots of reform?

Q2 2023 Update

In November 2013, Xi Jinping, in his first leadership year, convened a plenary Communist Party economic meeting and unveiled an ambitious reform plan (the so-called 60 Decisions) that included giving a “decisive role” to markets and pruning back the state sector. Nearing the 10th anniversary of the Third Plenum and those decisions, most are still to be implemented.

Without those structural reforms, systemic challenges have grown, including crushing local government debt, an ongoing property sector crisis, continued addiction to investment projects for GDP growth, and falling confidence among both domestic consumers and businesses and foreign investors. Leaders and economists hint that macroeconomic stress is necessitating a renewed push for reform.

As of the second quarter of 2023, the rhetoric and pronouncements have started to turn more practical, but concrete actions that have been taken thus far are not sufficient. Must-see improvements include economic research and information openness, no further crackdowns against foreign companies, and improved access to credit for private companies.


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