Reform outlook uncertain

The Chinese leadership is working on a new round of economic reforms.

On Monday, the Party’s top policymaking body (CCCDR) held its first meeting since November.

The readout said:

• "This year is another important year for comprehensively deepening reform;the main task is to plan further comprehensive deepening of reform."
• "This is…the next chapter of carrying out comprehensively deepening reform since the Third Plenary Session of the 18th Central Committee."

Hmmmm. We’re not sure what to make of that.

Some context: Since September, we have been expecting the current Central Committee to hold its Third Plenum, at which it is expected to roll out a long-term reform plan (similar to the reform plan announced at the 2013 Third Plenum).

• But to date, the Party has not set a date for the Plenum.
• Nor have they explained the delay.
• This has let to speculation that the Plenum may be scrapped altogether.

The CCCDR readout further muddies the water.

• The CCCDR readout could mean that the CCCDR is drafting a reform plan for the Third Plenum.
• But it could also mean that no Third Plenum is needed because the CCCDR will issue its own reform plan without needing to convene the Central Committee.

Get smart: The economy is suffering from a lack of confidence, in part because there is no clear indication from central authorities as to where economic policy is headed.

• By adding to the uncertainty, Monday’s CCCDR meeting will further undermine business confidence.