The China question

Philipp Ivanov

Chief Executive Officer, Asia Society Australia

The 19th Chinese Communist Party's Congress marked a seminal moment in the story of China’s rise. But will it be a true beginning of 中国世纪 (the China Century) or the moment when China lost its growth and opening-up momentum?

At the heart of the debate is the question of the economy. Can China effectively pursue a political tightening and consolidation agenda led by President Xi Jinping, while implementing ambitious reform from the Party’s 2013 blueprint?

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Former Australia Prime Minister Kevin Rudd, now Asia Society Policy Institute President, speaking at our recent members briefing said despite many obstacles along the way, China’s track-record of the last four decades in growing its economy while strengthening its political system suggests it can.

"The jury is out if the Congress is a true beginning of 中国世纪 (the China Century).” - Philipp Ivanov

Expanding his thesis in a Project Syndicate essay, Rudd said for the last 40 years, China has“implemented a national strategy that, despite its many twists and turns, has produced the economic and political phenomenon that we see today”.

“It would be reckless to assume, as many still do in the US, Europe, and elsewhere, that China’s transition to global pre-eminence will somehow simply implode under the weight of the political and economic contradictions they believe to be inherent to the Chinese model,” he said.

Usurpation

But Dr Geoff Raby, former Australian Ambassador to China and a member of Asia Society Australia, disagrees.

Dr Raby argued in The Australian Financial Review that as a result of the “usurpation” of power in Xi’s hands and the departure from the established practice of “collective leadership” in the Chinese system the country may lose its capacity for the effective decision-making necessary to implement the economic reform agenda.

As an example, he points to the unsatisfactory progress of the State Owned Enterprises (SOE) reform under Xi’s rule.

The direction of China’s economic reform is of paramount importance to Australia and over 100 other nations which count China as the largest trading partner.

As Australia debates China’s political and foreign policy shifts and the intent and manifestations of Chinese power, including here in Australia, the economic relationship between our nations remains a success story and a dominant positive factor of the bilateral relationship.

DFAT Secretary and Asia Society Australia Advisory Councillor Frances Adamson, in two important speeches on China, emphasised the breadth and depth of the relationship, particularly a long-standing Australian policy of having “a robust framework to acknowledge our differences, discuss one another’s concerns, and pursue our mutual interests”.

Economic ties and Australia’s full-hearted support of China’s economic opening-up have been major contributors of good will in the bilateral relationship. But if under Xi China’s economic reform agenda falters, will the scales of agreements and disagreements in our relationship tilt towards the latter?

This is the question we at Asia Society globally and in Australia will be focussing on in our programming and thought-leadership.

China dashboard

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It is in this global context the Asia Society has launched the China Dashboard: Tracking China’s Economic Reform Program - a new interactive online project by the Asia Society Policy Institute and the Rhodium Group - to track China’s progress toward its self-defined reform objectives, announced in 2013.

The tool uses objective data rather than conjecture to illuminate the state of reforms for non-economists in policy, business and other walks of life.

To build a shared reference point for China’s economic reform progress, The China Dashboard provides a set of independently developed resources updated quarterly:

• A net assessment of progress across 10 key Chinese economic reform priorities;

• Fiscal affairs, financial system, trade, cross-border investment, innovation, competition, state-owned enterprise, environment, labour, and land;

• Detailed individual assessments of each policy reform cluster, including a primary indicator, summary assessment, data analysis, and policy review; and

• Clear methodology notes explaining the choices behind each indicator.

For more information, access The China Dashboard.

Philipp Ivanov is Chief Executive Officer at the Asia Society Australia

China’s economic performance under Xi will be a topic of the Asia Society Australia’s Forecast Asia briefing for members with Dr Paul Gruenwald, Managing Director and Chief Economist (Asia-Pacific), S&P Global on November 21 in Sydney.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.