Faiz Paracha
China’s Communist Party (CPC) in 18th Central Committee “Third Plenum” announced diversified revolutionary reforms titled “Decision on Major Issues Concerning Comprehensively Deepening Reforms”. It covers 16 areas and 60 individual items. It is the new Chinese national character which created this new chapter in its socio-economic prosperity.
The reforms reflect China’s national determination to remove all discriminations. To work for greater economic integration, social cohesion, political motivation and a giant leap toward market economy. It also covers the human aspects of the throat-cut competition considering laborers, workers and common people an asset to sustainable economic development. It is the blue-print of blue economy. It chalks out policies and means to achieve greater industrialization, investment, taxes and revenues. It is above all the manifestation of people’s welfare. 
President Xi Jinping and Premier Li Keqiang, announced several effective policy measures in social policy, mainly to unify rural and urban social security systems and to abolish controversial labor camps. The setting up of the National Security Committee and the Central Leading Group on Reform indicates that the new leaders have a strategic vision to achieve the desired goals in the days to come.
It consists of major economic reforms to provide equal playing field to local and foreign businessmen. It upholds the importance of foreign investment and announces new incentives/reforms for the local and international investors in China. It intends to overhaul the economic and financial sectors. It speaks highly about the importance of social development. It is all about welfare of the common people. It guarantees the environment and nature. It stands for corporate social responsibility, transparency, accountability and rule of the law. It pinpoints the hurdles in the further strengthening of social security in the country. It is a systematic approach to establish corporate governance and generation of revenues to get rid of debts. The last but not the least, it is the engine of further socio-economic development, attracting foreign investment, resolution of labor shortages/disputes and tax reforms. 
It has national, regional and global socio-economic ramifications which could be witnessed in the markets of the United Arab Emirates, Bangkok, Brussels, Washington, London and Frankford in the days to come. One of the major economic multiplier effects would be tremendous increase in the bilateral trade volumes between China-GCC/UAE, China-EU, China-Pakistan and of course China-US.
Broadly speaking according to newly announced reforms, the Chinese leadership will streamline its efforts among the local, central and private sectors of the state to further develop interior and border cities. Through a coordinated effort the level of investment in those regions will be enhanced, while authorities will guide efforts to upgrade technology in industrial and agricultural production according to each province’s comparative advantage. Scientific management of governance will be followed to achieve desired goals in the days to come.
More focus will be given to service sector and transportation infrastructure. The logistic entities and the international connectivity of hinterland cities in such regions will be enhanced through cooperation between the Chinese administrative authorities and both Chinese and foreign incentivized private investors. Nurturing of trade activities will be increased in order to achieve sustainable development; ports and economic cooperation zones, therefore will also be opened to tourism and logistical investment in the country.
Third Plenum also pinpoints the importance of market economy claiming that market access will be further developed for all investors, including foreign ones. To maintain the high standards of transparency, accountability and fair-play comprehensive measures will be institutionalized and predictability of official procedures will be taken swiftly. The experiment of transforming Shanghai into “a mainland Hong Kong” through the inauguration of the “pilot free trade zone” in the city was referred to as a breakthrough in the opening-up process. Moreover, gradually more such free trade zones will be established in different parts of the country. Through these zones, China will encourage local and national entrepreneurs to further invest overseas and loosen its grip on custom controls and financial inspections.
Further modernization of service sector stands tall in the Third Plenum. More attention will be given to health, finance, education, culture, e-commerce, elderly care, and child care. Local and central government initiatives will be initiated in order to draw more international investment and increase domestic consumption. Other priorities were environmental protection, investment protection, and the consolidation of FTAs especially in the country’s close neighborhood.
The newly announced reforms talked about “scientific macro-regulation” and underlined it as a main function of the government in the opening-up process ahead. Efficient business management and coordinated regulation by central and local authorities will be put forth as keys to increase productive efficiency. It also aims to mitigate structural risks by encouraging domestic demand and gradually re-organizing production to cater to domestic needs. On its part, the government will introduce new regulations to give more authority to private enterprises to take investment decisions, except in sectors concerning eco-safety, national security, energy and other underground resources, and the most vital public interests.
Environment protection is one of the most salient features of the Chinese reforms. From to-day to onward, new higher standards will be implemented on all firms (public & private) and investors will be held responsible regarding environmental protection, energy preservation, safety regulations, and technological inputs.
Concluding Remarks
The new socio-economic contract would hopefully put China on the right path of political glory, economic sustainability, financial stability and human dignity. It is the new beginning of deregulation and further economic liberalization. It is the new charter of massive industrialization, free trade zones and labor rights.
It values the importance of social security system in the country and strategies have already been announced to make it more productive, effective and supportive for all the citizens. Above all it is the systematic advancement of its social economy in the age of globalization where interest is the ultimate weapon in the hands of free market economy’s handlers and resultant is the frequent political chaos, alarming ratios of poverty, unemployment, hunger, disease and underprivileged people living in the different parts of the world.
Some reform measures, such as curbing overcapacity and controlling local government spending, will involve short-term pain. But with strong political commitment, that specific matter will be resolved. Creation of a level-play field for private companies/entities and many other related reforms can unleash private sector demand for investment and consumption, providing support to growth even in the near future.
It is hoped that the combination of fiscal and financial reforms would boost productivity growth. Systematic urbanization would hold up infrastructure investment growth, and unleash the private investment power through easier access to funding for private companies. Deregulation would support for innovation.
Historically, unlike previous third plenums, which mainly focused on economic issues, this time Chinese leadership has pledged to deepen diversified reforms, with the general goal of developing socialism with Chinese characteristics and advancing modernization in the State governance system and governance capability.
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