For oversea investors and watchers of the Chinese economy, the largest uncertainties this year are those surrounding the upcoming 19th Party Congress, where Chinese President Xi Jinping will officially assume his second term. To wit, the date for the meeting hadn’t been known to the world until just today, when October 18 was finally penciled in by China’s state media.
Such an important political event provides a lot to watch for. Will Mr. Xi install potential successors in the Politburo Standing Committee, the country’s innermost sanctum of power? Will antigraft chief Wang Qishan stay, breaking the “retirement age” of 68 for senior officials and potentially paving the way for Mr. Xi to rule for more than ten years? How many of Mr. Xi’s protégés and close allies will be promoted to top posts? Though far from clear at this point, the answers to these questions will have a profound impact on the world’s second largest economy for years to come.
Despite all the uncertainties, there’s one thing China watchers should not be expecting from the party congress: that China will finally move forward with pro-market reforms its slowing economy badly needs.
As I’ve explained before, Beijing’s intentions for substantive economic reforms can be gauged by looking at an entirely different policy matter: the level of government censorship. The administrations of post-Mao Chinese presidents in the past have shown a clear pattern: Censorship is looser when the government has pro-growth economic reforms to roll out but becomes more pervasive when those reforms stall. The fact that China is experiencing increasingly heightened censorship in recent months, therefore, is a clear sign the upcoming party congress won’t be enacting meaningful economic reforms.
The Chinese government’s efforts to keep media outlets along the party line are stunning. On May 31, the State Administration of Press, Publication, Radio, Film and Television — China’s media regulator — ordered various media outlets to produce “public service ads” that brag about the upcoming meeting. It’s impressive how thorough the guidelines are:
Media outlets must increase their investment in producing public service ads [to boast the party congress] and guarantee that at least four…