Xi Jinping Regime Trying to Avert the gTwo Traps h - Will the policy of gtilting leftward politically and rightward economically h be sustainable?

C. H. Kwan
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C. H. Kwan: Senior Fellow, Nomura Institute of Capital Markets Research

Public Policy Review, 2015, vol. 11, issue 1, 175-204

Abstract: Since launching the reform and opening-up initiative, China has been aiming to achieve economic development and a transition to a market economy at the same time. During this process, there is the risk that China could be caught in two traps: a middle-income trap and a transition trap. Indeed, there are already signs that this risk is becoming a reality, including the widening income gap, environmental degradation, corruption among bureaucrats, a decline in the potential growth rate associated with a shortage of labor, and the stalling of the reform of state-owned enterprises. To avoid being caught in these two traps, the government of Xi Jinping has set forth the policy of gtilting leftward politically and rightward economically, h which seeks to strengthen General Secretary Xi fs power base on the political front and to unleash the vitality of the market and companies by minimizing government intervention on the economic front. The details of economic reforms were decided at the Third Plenum of the Chinese Communist Party held in November 2013. With these reforms expected to meet resistance from vested interests, the government must obtain the people fs support for the economic reforms and undertake political reforms to promote democracy and the rule of law.

Keywords: Middle-income trap; transition trap; Third Plenum; Xi Jinping (search for similar items in EconPapers)
JEL-codes: O53 P26 P31 (search for similar items in EconPapers)
Date: 2015
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