China is changing

The Third Plenum of the Communist Party of the Peoples' Republic of China marks a turning-point in all areas of Chinese life - with consequences for Israel.

The Third Plenum of the Communist Party of the Peoples' Republic of China is now history. In a lifetime of following events like this one, I have never seen such a range of opinions concerning its significance, from "There is nothing new" to "A major turning point for Chinese society".

One excellent analyst, for example, wrote: "The Plenum heralds an era of economic centralization, austerity for the popular masses and political repression". Another, commenting on the same event, remember, wrote: "All [decisions] point to the opening of a new chapter for comprehensive change in China". An equally excellent and highly qualified analyst proclaims: "From the decision it can clearly [be seen] that reform in China is no longer limited to 'economic reform', the 'comprehensive reform' to be pursued by Xi and premier Li extends to every corner of Chinese society".

After studying the final documents released after the end of the Plenum, my conclusion is that, always assuming vigorous implementation, the decisions taken at the meetings do indeed mark a turning-point in the history of communist China.

After the initial period of violent repression and widespread state-induced starvation under a totalitarian economy and polity, the first great change took place after the death of Mao and when Deng Hsiao-Ping took over the reins of power. He is famous for having stated that "It doesn't matter what the color of the cat is, as long as it catches mice". The economy was substantially opened to market forces and the result was an explosion of growth in productivity and exports that astonished the world. There was, however, no important movement on the political and social fronts, which remained firmly under suffocating centralized control.

The new set of reforms is, in contrast, in all areas of society:

The economic: The state-owned enterprises (SOEs) will be reined in and the market opened further, with onerous regulations and taxation lessened and a welcome to foreign investment, protection of intellectual property rights and extension the rule of law in the economic area.

The social: Couples will be permitted to have two children, not just one. The "reeducation through labor" system under which the police could condemn people to prison terms without formal charge or trial will be abolished. Private cultural enterprises will be permitted and greater freedom of cultural expression encouraged.

The political: To discourage corruption, many decisions such as the seizure of land that have been made by local officials will now require authorization at the provincial or national level. Officials at all levels will find their positions more heavily regulated in terms of transportation, status and housing.

Military: There will be greater rationalization of the armed forces, with a restructuring among the services and a reduction in the size of the officer corps. Non-combat functions and units will be reduced or eliminated.

Organizational: High-level commissions will be established to supervise the implementation of all reform decisions and will report directly to the premier and the president.

It seems to me that there can be no doubt that the decisions are of fundamental significance and if carried out will greatly enhance China's economic performance and relieve many of the social pressures which have been building up dangerously.

What does it all mean for Israel? As outlined here in previous columns, it is obvious from recent events that China has decided that (1) the US is withdrawing from the Middle East; (2) No other country has the ability or apparently the desire to fill the subsequent vacuum, and (3) of all the Middle Eastern countries, the one that offers the most to China is Israel, which as a result will become the centerpiece of Chinese activity in the region.

The more China develops in a balanced fashion, and the more Chinese society opens up internally and externally, the better for Israel, which is forced to diversify its international networks beyond anything in its past history.

Norman A. Bailey, Ph.D., is Adjunct Professor of Economic Statecraft at The Institute of World Politics, Washington, DC, and a researcher at the Center for National Security Studies, University of Haifa.

Published by Globes [online], Israel business news - www.globes-online.com - on November 19, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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