China Reforms: Elite Incentives Are Wrong Way Says Pettis

China is holding the Third Plenum of the Communist Party’s 18th National Congress next month. The meeting will bring a large amount of social, political, and economic reforms to the country, but nobody is quite sure what they will be. Analysts, economists and even Chinese politicians have been clear about what needs to change in the Asian giant, but the extent to which the state apparatus is able to change the situation is not certain.

In his most recent letter, economist Michael Pettis argues that the incentive structure may...