Tuesday, October 14, 2003
On the plenum, I see nothing new on the editorial issued after the plenum. In fact, there are some disturbing trends for banking reform. In the editorial, financial reform is buried in the middle of the 7th paragraph, right after the phrases that the government should do all it can to support Western development and the revitalization of the Northeast. Although this trend began toward the end of the Zhu Administration, it signals that there will unlikely be any significant progress in financial reform in the near future. The government seems much more focused on redistributing resources to Western China, SOE reforms, and rural development, than in institutional changes. Moreover, this documents signals to local officials that priorities like SOE reform, increasing rural income, and Western developments are now higher than financial reform, which will likely increase political pressure on banks to lend to these policy goals. The only step forward I read was the phrase giving private enterprises equal rights and equal access to market, but that has been achieved in many places already.