Market economy

One of the most important statements Premier Li Keqiang made in his 90-minute opening speech on the economy to the National People's Congress was: "We will let market competition determine which businesses survive."

From now on, state enterprises, once the linchpin of China's economic and social stability, will be taking a backseat. They're fair game for private investors. The new rule of thumb is: reduce excess capacity.

But Li, in his speech, also predicted great things for medium-sized, small and very small businesses, and said that the state will intervene less in the economy and delegate more power to the provinces. The number of branches open to foreign investors will double. The Chinese economy is on the threshold of major restructuring as a market economy - just as Deng Xiaoping, the godfather of economic reform, would have wanted it.

But crash barriers will be in place. Environmental protection is to be prioritized and the disadvantaged west of the country is to be developed. The needy will be helped and housing will remain affordable. And innovation is to take precedence over growth.

The premier also stressed that the Chinese economy is "inefficient" and that last year's problems were greater than expected.

He was realistic about China's deficiencies as well as the challenges and opportunities that economic restructuring will bring, and clearly has no illusions about the mammoth scale of the task ahead. However, he could have formulated this more precisely. After all, 1.4 billion people are embarking on an experiment such as has never been seen before in the history of the world. No one knows if it will be successful.

New Chinese realism

All in all, it was a pragmatic speech. As Deng once advised, Li "seeks truth from facts." This explains why the military only got one mention – on page 37 of his 39-page speech. That no doubt needled the generals, once so powerful. As far as the premier is concerned, foreign policy is first and foremost economic policy. It will become easier for Chinese companies to invest abroad, while new free trade zones are to be negotiated and a new Silk Road opened.

It was a speech that spelled out exactly what Li means by the "new normal" of slower and more sustainable growth. Or, as German weekly Die Zeit put it: "The economic miracle will continue, but in a different guise."

All these targets might sound familiar to the West. Even so, some western observers can't quite get their heads around how China is changing. Somewhat prematurely, they're talking about a "power thrust reversal" – a term usually used to describe the temporary diversion of an aircraft. Others fear that the era of Deng's reforms is over, while yet another theory is that China is isolating and barricading itself. Some are even concerned that it's waging war on western values.

Education minister Yuan Guiren has indeed made pronouncements to back up this idea and hostility has long been building towards intellectuals and universities that appear to take their cues from the West. But there is neither explicit nor veiled reference to it in Li's speech. Constraints on open debate on social media and restrictions on academic freedom in universities and leading think tanks appears to be a party matter not a government one. There is nothing to suggest that the government wants the communist party line toed.

Unacceptable old ways

But what is unacceptable on every level is that China continues to imprison people because of their political opinions. Refusing to adopt western values and make western mistakes without thinking can give rise to constructive debate – and the West would be well-advised to pay attention rather than bleating about anti-western sentiment. When it comes to the environment, for example. It's no coincidence that the hard-hitting documentary "Under the Dome" made by journalist Chai Jing got past the censors just before the National People's Congress convened. It's now been viewed online by millions of Chinese and has even been praised by Environment Minister Chen Jining. Open discussion of environmental issues is obviously no problem in today's China.

When it comes to economics, another key aspect of China's evolution, there is even open political debate. Christian Lindner, head of Germany's pro-business Free Democrats, could start a career as economics minister in China - if his party doesn't manage to return to parliament in Germany - without having to water down any of his jargon. He might need to be more careful mentioning civil rights. And since these presumably matter to him, he's not likely to be relocating to Beijing soon.

Generally, it would be an exaggeration to assume that China has become less free over the last year compared to the year before. This is only true for some sectors of society, intolerable as that may be for those affected. But a whiff of Mao is only wafting in some corners of the country. Elsewhere, the air smells a lot more like Ludwig Erhart, Jack Ma and Al Gore.

One of Germany's leading experts on China, Frank Sieren has lived in Beijing for 20 years.