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The central issue to be addressed by the Third Plenum is the proper role of the state in China, including the organization of the state and the relations of the state to markets and to citizens.
Much has been made of China’s recent internal and external rebalancing.
Reforms to China’s financial sector could be introduced at the upcoming third plenum. But if Xi has a serious political and social reform agenda, it probably will not be implemented before 2017.
The standard package of market-based financial reforms will not work until China’s banks are subjected to increased competition.
The fact that Beijing can recapitalize China’s banks during a debt crisis should not be reassuring: the debts must still be paid, and doing so will decrease demand and slow future growth.
Despite China’s very real challenges, the argument that the country is headed for a financial collapse is implausible, while the argument that growth will fall to 3-4 percent is illogical.
Following the 2012 elections in Taiwan and the United States and a leadership change in China, relations across the Taiwan Strait have generally remained stable.
China faces difficult constraints in rebalancing its economy.
Beijing has no choice but to take significant steps to restructure its economy. The only question is how to proceed.
State-owned enterprises have been significant value destroyers in China's economy, but CCP concerns over losing a political base will likely constrain economic reform efforts.