Skepticism aside, the latest pro-reform rhetoric does provide us with a limited preview of the real political battle over economic restructuring that will be fought in Beijing this fall. Inside the Chinese political hierarchy, the NDRC is, at best, a medium-size player. It does not have the last word on policy. That is perhaps why the release of the NDRC reform directive failed to excite Chinese financial markets last week.
For the business community, the signal event to watch is the Communist Party Central Committee's third plenum scheduled for the fall. According to tradition, the new leadership will likely unveil its comprehensive economic program at this important gathering. The blueprint, far more detailed than the NDRC directive, will reflect the consensus of the party leadership. It will be endorsed by the Central Committee and will most likely be introduced with all seven members of the Politburo Standing Committee in attendance. Only this ritual will convey the seriousness and commitment of the top leadership to painful but necessary reforms.
In the past, the new leadership would set up task forces to formulate detailed policies. The word on the street in Beijing is that several inter-agency groups are indeed busy working to develop specific reform proposals that will be considered by the top leaders in the summer.
Given the opposition to genuine reform from politically powerful groups, such as local governments, the bureaucracy, and the SOEs, any effort to reduce their privileges will meet strong resistance. The good news is that new Chinese leaders are aware that their own political fortune depends on their ability to deliver the necessary reforms and maintain growth. The bad news is that they are representatives of these interest groups and will unlikely enjoy a free hand in setting China's future economic course.
We should remain hopeful that Chinese President Xi Jinping and Li Keqiang will prove the skeptics wrong with a bold and credible reform program in the fall. But we should hold off on the champagne for now.
Minxin Pei is the Tom and Margot Pritzker '72 Professor of Government and a non-resident senior fellow of the German Marshall Fund of the United States.