Xi’s concept of reform differs from the markets. We believe that Xi recognizes the need for economic modernization now that the 1980s model of cheap labour, cheap capital and strong export markets no longer applies. But he wants to regulate the process in keeping with the stress on control shown by the Communist Party since its foundation 90 years ago. Above all, he does not want to allow economic liberalization to spill over into China’s political structure and weaken the Party’s grip. This means that reform will be applied very cautiously and that political and social factors will play a big role in policy implementation. (China 07 October 2015)
Investors disappointed by reform progress. Shanghai Composite Index move sideways for 2 years.