Beijing: The Paradoxical Economy Policy Orientation

The Third Plenary Session of the 18th Communist Party of China Central Committee just finished, and Wallstreet Journals (WSJ) hailed to the session and commented that the session would make China's economy more promising.

They may have made a mistake.

WSJ reported, in the official paper unveiled, China's Communist Party (CCP) affirmed that it would allow the market to be more "decisive" in the allocation of resources. It looked like that China intended to open more state-control resource markets to non-state enterprises, including foreign-invested companies.

Well, my point is negative, because CCP also declared clearly that the State-owned Enterprises'(SOE) dominance in the economy must be guaranteed. So here comes the contradiction: one hand, Chinese government intends to keep the dominance of SOE's, in another words, the monopoly of SOE would be reinforced rather than be weakened; on the other hand, it also said to allow the market to be more "decisive", meaning that there would be more competition, less monopoly. Then, can the two opposites co-exist? Can something is both black and white? I truly do not think so.

So I'm not so optimistic for China's economy in the near future, as monopoly-direction and competition-direction are both referred in the document of CCP's session, but I do not think the opposites may co-exist smoothly in the future.