The China Dashboard offers a regular assessment of China’s progress or regress on its own critical policy goals. The record more than five years after the Third Plenum plan was laid down remains in negative territory against the objectives set in 2013. For this Winter 2019 edition, we do not see market reform moving forward in 8 of the 10 areas we track. This is a continuation of what we observed in the previous Fall 2018 edition.
This edition goes to press less than one month from the March 1 deadline in U.S.-China economic negotiations. The complaints that impelled these talks focused on trade and intellectual property, but in actuality the agenda is much broader and deeper, cutting to the core of China’s economic model. Negotiations will include a focus on reducing the U.S. trade deficit with China through Chinese commitments to purchase U.S. goods and energy. This is the easy part. However, Washington also insists on fundamental structural economic reforms in China that would require no less than China’s reshaping its economic system.
It is unsurprising that China is resisting this demand. Chinese purchases of U.S. natural gas cargoes can be verified easily, ship by ship. But structural reform requires that China make the market decisive in its economy, not just promise a managed trade plan that would temporarily alter the U.S.-China bilateral balance at the expense of third nations. Without such commitments, any short-term outcome of the talks will not put U.S.-China economic relations on a sustainable path. And to assess how close or far we are from that path, we need a broad-spectrum, objective view of China’s policy priorities.