China Leadership Monitor

Changing the Rules of the Game: Macroeconomic Recontrol and the Struggle for Wealth and Power

Saturday, October 30, 2004

The intensification of China's effort since April 2004 to reassert macroeconomic control has triggered a scramble for money and resources, as businesses and local governments faced an abrupt and unanticipated change in the overall economic climate. The scramble for resources has contributed to strains among regions and within the top leadership. It has also touched off conflicts among different business sectors—including state and private—as they maneuver to avoid the worst effects of reasserted macroeconomic control. The ultimate impact of the current imposition of macroeconomic control is still highly uncertain, and new consequences continue to ripple outward from this policy choice. The Fourth Plenum of the 16th Central Committee, scheduled for mid-September 2004, will bring these issues to a head, as the economic and political implications of macroeconomic recontrol become apparent and are worked through.