Reform is not just a plan; it is already happening. Economic openings to Central Asia and to ASEAN (specifically to Vietnam) are well underway, and reform will include further international opening. The Third Plenum’s decisions follow the launch in September of the Shanghai Free-Trade Zone, which will open new sectors to foreign investment and permit largely market-based financial transactions and capital flows. The liberalization of capital flows is intended to be a gradual national policy, channeled through trusted institutions in Shanghai. For trade in goods, the new free-trade zone is intended to compete directly with Singapore and Hong Kong. China fears dependence on those entrepôts in the event of conflict. For foreign investors, the policy will be to expand greatly the range of opportunities while curtailing foreign control; foreign companies, for example, may hold minority stakes in the telecoms sector, while dominant foreign companies like Monsanto will face constraints.
Posted on: Tue, 19 Nov 2013 04:28:58 +0000
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