China’s Third Plenum vagueness misses the moment

At this week’s Third Plenum meeting, President Xi Jinping’s Communist Party sent many of the right signals to skeptical investors worried about the trajectory of Asia’s biggest economy – including pledges to “unswervingly encourage” the private sector.

But Xi’s team picked a risky moment to keep global investors guessing about how it plans to revitalize a US$17 trillion economy facing a quadfecta of troubles at home. And at a moment when the West is throwing up ever-rising walls to Chinese exports.

True, Xi’s party normally waits several days before offering more granular ideas about retooling. Later this month, markets hope to learn more after China’s 24-member Politburo convenes.

Yet, if ever there was a time to break with tradition, it’s now. Xi didn’t hold the event in 2018, heightening expectations for clear economic smoke signals. Amid intense global uncertainty, the typical drip, drip, drip disclosure plan failed to read the urgency of the day.

With the eyes of the world on the five-yearly strategy session, Xi’s inner circle had an ideal opportunity to reboot the reform narrative. There was no better moment to explain how Beijing will end the property crisis, stabilize local government finances, boost consumer demand and tackle mounting demographic challenges.

What investors got instead were vague pledges of “high-quality development,” “Chinese-style modernization,” “innovative vitality” and “actively expanding domestic demand.”

In reality, this is a make-or-break moment for China’s relationship with international funds. Mouthing lines about supply-side upgrades and about bumping up domestic demand is nice, but greater clarity is needed. As the US and Europe angle to make trade wars great again, the recalibration