China’s leaders must put reform pledges to the test

Since President Xi Jinping took power 18 months ago, Beijing has adopted sweeping commitments to economic reform. These pledges include giving the market the “decisive” role in allocating resources, eliminating regulatory barriers that have stifled the private sector and enhancing China’s social safety net.

These commitments are welcome. Yet market participants and business leaders reserve judgment, waiting for them to be implemented.

The reforms, however, cannot be judged by unrealistic expectations or free market fundamentals. Mr Xi has no plans to remake China’s economy in the image of a Group of Seven country. Nor is it realistic to think Beijing will simply privatise its 113 central state-owned enterprises.