Visionary CPC blueprint more than just words

BEIJING - When the Communist Party of China (CPC) has something to say about economic reform and opening up, the world sits up and pays attention.

Despite being on vacation when Chinese leader Xi Jinping delivered a report to the all-important 19th CPC National Congress, Daniel Liao watched every second live online.

"His words were a shot in the arm for foreign businesses like us," said Liao, head of China operations at a Singaporean real estate firm.

During a wide-ranging address, Xi unveiled the Party's ambitious goal to "develop China into a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful" by the mid-21st century.

HSBC economist Julia Wang described the long-term nature of the plan as "remarkable and unprecedented."

However, making Xi's vision become a reality will demand a freer market and more open economy. There is no lack of faith in the CPC's will and ability to deliver its promises.

At the congress, Xi spoke of letting the market play the decisive role in resource allocation, pursuing opening up on all fronts and significantly easing market access.

Liao's company, City Developments Limited, has invested around 1.7 billion U.S. dollars in China in the past six years, primarily in real estate, environmental protection and new energy.

Liao said the company had benefited significantly from streamlined administrative approvals and increased access for foreign investors.

Cutting red-tape was just part of more than 1,500 reform moves made by the CPC since the previous national congress in 2012.

The Party has a good record in keeping its word. While its economic policies remain far from perfect, reform has deepened at a swift and steady pace over the past five years.

State Council departments have canceled or delegated the power of more than 600 administrative approvals to lower-level offices, meeting government targets ahead of schedule.

Corporate burden was slashed by 2 trillion yuan (about 303 billion U.S. dollars) through cuts in taxes and fees from 2013 to 2016.

Lumbersome state-owned enterprises have seen their efficiency improved thanks to restructuring and improvements in corporate governance, reporting higher profits this year.

The economy has never been more open, creating a better business climate for foreign investors.

Revisions to the foreign investment catalogue have brought down the number of restrictive items by 65 percent from 2011.

Eleven pilot free trade zones have been set up with pre-establishment national treatment and a negative list approach to market entry. These practices would be implemented "across the board," Xi said Wednesday.

In its 2017 China Business Report, the American Chamber of Commerce in Shanghai said 77 percent of U.S. companies in China remained profitable last year, up 6 percentage points from 2015, with 73.5 percent reporting increased revenue, up 12 percentage points from 2015.

Sara Dai, regional president of Asia Pacific with Denmark-based biotechnology giant Novozymes, said she was happy to see the CPC's commitment to protecting the rights of foreign investors.

"We are confident of expecting a more transparent market and level playing field for all types of enterprises in China," she told Xinhua after reading the report delivered by Xi.

China has every reason to deepen reform and open wider to the outside, without which it would not have become world's second largest economy, or as Xi put it, "stood up, grown rich, and become strong."

The country's development has come to, in the words of Xi, "a new historic juncture." China now "embraces the brilliant prospects of rejuvenation," and to achieve that, one of the key tasks is to deepen reform and "get rid of all outdated thinking and ideas and all institutional ailments."

Xi announced the Party would "sort through and do away with regulations and practices that impede the development of a unified market and fair competition."

"China will not close its door to the world; we will only become more and more open," he said.

Officials were quick to get down to the nitty-gritty. Guo Shuqing, the country's top banking regulator and a delegate to the CPC congress, said Thursday measures would be taken to open more to foreign banks in terms of shareholding restrictions and institution establishment.

A day after Xi spoke of exploring the opening of free trade ports, Shanghai Party chief Han Zheng, also a congress delegate, told reporters the city was already making plans on the issue.

Global financial conglomerates, keen to seek direction in China's reform and opening, were positive on the prospects of the CPC's blueprint.

Commenting on Xi's report, Nomura chief China economist Zhao Yang anticipated continued structural reforms in the country.

The Party's economic focus will shift to the "quality and equality of development," with less on specific GDP growth targets, said UBS chief China economist Wang Tao in a research note.

She expects increased direct financing and deepened fiscal reforms for the next two to three years, and faster SOE reform in the coming year, which will be positive for the financial sector.

Julia Wang at HSBC said Xi's pledge to deepen market-oriented reform in the exchange rate is "an important endorsement from the top leadership about China's forex reforms and capital account liberalization."

With 2018 marking the 40th anniversary of China's reform and opening up, the CPC's new leadership, to be elected at this congress, is expected to make greater strides in overhauling and opening the economy.

Xi declared that "socialism with Chinese characteristics has crossed the threshold into a new era."

At the same time, the economy is at a new starting point and will move toward slower but higher-quality development.

As Xi said, to achieve national rejuvenation, it is imperative for the Party to follow the tide of the times, respond to the wishes of the people and have the courage to reform and open.