HONG KONG (Reuters Breakingviews) - President Xi Jinping’s southern tour wasted an opportunity to re-inspire the country’s private investors and its trading partners. This week he retraced the steps of reformist icon Deng Xiaoping in Guangdong province, an export powerhouse that generates over $1.3 trillion in GDP and drove an economic boom. But it was an awkward, low-key affair, shrouded in secrecy. Far from announcing fresh reform that might help the private sector, Xi barely spoke during a ribbon-cutting ceremony for a $15 bln bridge. When he did, he endorsed self-reliance over trade.
Suggestions that Xi favours stability and state-owned enterprises over pesky private companies have been met with rebuttals in state media, as has any hint that his commitment to free trade may be shallow. Both suspicions, though, will have been reinforced by this week’s stilted TV footage.
Chinese financial regulators have certainly shown their awareness of the importance of private enterprise, moving in recent months to lower companies’ tax and paperwork burdens, and to ease their access to credit. But that has been offset by meddling from other parts of officialdom. Firms are getting force-fed stakes in struggling state dinosaurs, pushed to invest in unattractive public projects, and required to donate generously to poverty alleviation.
A highly symbolic trip south - including the inauguration of a bridge connecting Hong Kong, Macau and the mainland - could have provided a platform for Xi to re-brand himself right where China’s economic miracle began. With stock markets falling and officials scrambling to shore up confidence, the timing would have been right too for a liberalisation push. Yet opening the bridge, Xi had not even rhetoric to offer.
Worse, during a visit to a manufacturing plant in Zhuhai, he was quoted by state media repeating calls for Chinese companies to become more “self-reliant”- in other words, to import less. That is hardly a step forward, nor will it help Guangdong’s exporters. It also sends the wrong signal to China’s trading partners, who want the country to import more, not develop local substitutes. Better to have said nothing at all.
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