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The Hunt for a Less Red October

China’s leaders convene the 19th Party Congress on October 18. Human minds naturally seek out narratives, and one of today’s predominant China stories is that this political milestone will mark the restart of stalled economic reforms.  The argument for an impending sea change has three sources: extrapolation from past Party Congress patterns; constant repetition of the mantra that power consolidation is key to unlocking reform; and analysis of current, preliminary policy moves and the urgency of reform to head off crisis. If the Congress does kick off reform, an epic shift in supply and demand projections lies ahead. If not, or if reform arrives only rhetorically, a different kind of trouble lies ahead. China’s new leadership will likely soon declare that a brave new era of reform is afoot. Will that mean to them what it means to us, and how are we to objectively tell the difference between a real “big bang” and reform in pledges only?

Posted October 10, 2017
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