In his inaugural speech, Xi Jinping, the newly elected party secretary, admitted that official corruption is one of the most serious challenges that the party faces. On 31 December 2012, the newly elected Standing Committee of the Party convened to discuss the anti-corruption program, and concluded that in intensifying the supervision of officials' adherence to discipline, the party will "use the most effective measures and observe a material impact". We believe that 2013 will mark the most vigorous anticorruption fight by the Chinese leadership in decades, as it clearly recognizes that "if left unchecked, corruption would lead to the demise of the Party and fall of the State". Specific actions that may be taken include a clampdown on officials' consumption at restaurants, tightening enforcement of gift receiving rules, restrictions on overseas visits (especially to Macau) by officials, as well as public disclosure of officials' personal income and family wealth in pilot regions and departments.

David Fuller's view Governance Is Everything, as we often say at Fullermoney, particularly over the longer term. If Xi Jinping and his colleagues can credibly follow through on their stated intentions regarding corruption, and that will not be easy, then China will prosper over the next 10 years.

Not all subscribers will feel that they have the time to read this 105 page report, even though they are interested in China. However, I strongly recommend that you at least read the very concise introduction on "Recovery and reforms".