There have been major personnel changes at all levels of the Chinese government since 2016 in preparation for the second term of the Xi Jinping government, which will start in 2018. But the most crucial change will come when Beijing announces the new set-up of the Standing Committee of the Politburo (SCP) at the 19th Party Congress (expected in October/November this year). Except the President and the Premier, the other five SCP members will have to retire. There are many speculations on the composition of the new SCP, which will determine China’s growth and reform policy outlook in the next five years. Following is my educated guess based on our knowledgeable contacts in China.
Let us start with the fact that there are two confronting forces: the conservatives (old growth model supporters) versus the reformers (new growth model supporters). If we can figure out which force will dominate the new SCP, we can get some clues about the reform policy outlook, including state-sector reforms, debt-reduction, capital account convertibility, financial liberalisation etc., in President Xi’s second term. To perform the analysis, we have narrowed down the number of highly-likely SCP contenders to form different scenarios for assessment.Download to read more