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TheStreet Open House

China's Other Transition

Well, if the Party says it, you can pretty much bank on it (pun intended).

Which brings us back to the leadership transition. When the new Central Politburo Standing Committee (PSP), China's decision making body, emerged with a narrow majority of conservative hardliners last week, many questioned whether the new leadership would continue the outgoing administration's economic reforms. These editorials, published during the Party Congress, strongly hint they will, though, since the committee governs by consensus, change will likely be incremental and slow.

But reform remains in the party's current Five-Year Plan, keeping it on the agenda through 2015, and the state-run media blitz seemingly confirms there's no going back.

For Chinese citizens and international investors, this is a welcome development.

The economic benefits of easier corporate financing are obvious: More lending means more businesses can invest more money in growth-oriented endeavors, helping money circulate throughout the broader economy. Broader capital markets with easier access for foreign investors vastly increases folks' ability to capitalize on China's growth.

The government may lose its favorite economic lever, but if this liberalization continues, China will gain so much more.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

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