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China’s Third Plenum a Disappointment

Posted by WorldWideMarkets . on Nov 14, 2013 3:33:00 AM
China ended it’s Third Plenum earlier this week and it was a yawn at best. It was never going to be earth shattering but was something to watch since China is the world’s second largest economy and anything it does impacts currencies like the aussie and kiwi directly and everything else because of its global weight.
But investors heard almost nothing. The Chinese government is looking for results but gave little indication of how they will come. The rhetoric on allowing the market to play a bigger role in allocating resources and improving the government’s role was important and interesting but without details it means almost nothing. It is certain that the government is not going to give up its prime importance in Chinese society. Social stability to preserve the communist party’s dominance in China is still paramount.
More details will be released in coming days but don’t expect any loud disruptions. Investors are looking for details on interest rate and capital flow controls as well as property rights. Without any major changes, the status quo continues for now. Great Wall of China July 2006 resized 600

 

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