China Herald: China under Xi: the party or the economy

Arthur Kroeber

Is Xi Jinping striving for a more efficient economy or does he want to solidify party control, wonders economist Arthur Kroeber in the Australian Financial Review. "There is growing concern that Xi has tipped the scales in favour of political control, at the expense of economic growth,"

The Australian Financial Review:

To the economist Arthur Kroeber, the founder of Gavekal Dragonomics and a non-resident fellow at the Brookings-Tsinghua Centre, the question is whether Xi will be willing to trade some reduction in state control for greater economic efficiency or if he's simply solidifying the party's authority at all costs.

"He has launched significant economic reforms ... but progress on most reforms has been slow and critics argue that even if they are completed they will do little to reduce state power and boost economic dynamism," wrote Kroeber in his just released book China's Economy; What everyone needs to know.

To understand how Xi has remade China's political landscape since becoming the country's top leader in November 2012, its worth examining the new titles created for himself.... For Kroeber the issue is that with tighter political control, the opportunity for China to maintain high levels of growth, via reform, is threatened.

Despite promising signs early on in Xi's presidency the government would tackle the dominance of the state-owned enterprises by improving management and encouraging mixed ownership, little progress has been made. Meanwhile, the number of state-owned firms continues to grow from 110,000 in 2008 to 160,000 in 2014.

For Kroeber the issue is that with tighter political control, the opportunity for China to maintain high levels of growth, via reform, is threatened.

Despite promising signs early on in Xi's presidency the government would tackle the dominance of the state-owned enterprises by improving management and encouraging mixed ownership, little progress has been made. Meanwhile, the number of state-owned firms continues to grow from 110,000 in 2008 to 160,000 in 2014.

"There is growing concern that Xi has tipped the scales in favour of political control, at the expense of economic growth," he says

More in the Australian Financial Review.

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