March 9, 2013

FORTUNE — Ever since Xi Jinping, China’s new leader, ascended to the top spot of the ruling Communist Party’s hierarchy last November, he has promised repeatedly to restart China’s long-stalled economic reforms. With the opening of the annual session of China’s rubber-stamp parliament (officially known as the National People’s Congress), Xi and his colleagues finally have a chance to show the Chinese people what kind of reforms they have been thinking about.

Of course, it may be too early to analyze the pronouncements coming out of the congress since its most important business, such as announcing the restructuring of the State Council (the cabinet) and appointments of key economic officials, has not concluded. However, based on the information leaked to the press, it appears that the new leadership will not embark on a bold course of reform. Caution, not risk-taking, will remain the modus operandi of Chinese leadership.

Take, for example, the proposed restructuring of the State Council. The incoming premier Li Keqiang, who presided over a similar restructuring effort five years ago, seems intent on eliminating some ministries and merging others. The scandal-plagued railway ministry, which has borrowed hundreds of billions of dollars to build China’s money-losing high-speed railway system, is almost certain to be merged into the ministry of transportation. The national family-planning commission, an agency in charge of the enforcement of the much-vilified one-child policy, will be absorbed by the ministry of health. And an agency responsible for censoring the print media will be combined with the agency that oversees broadcast media.

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On the surface, it is hard to label such bureaucratic reshuffling a bold step in economic reform. The proposed restructuring most notably leaves China’s super-ministry, the National Development and Reform Commission (NDRC), untouched. The NDRC, which has accumulated unprecedented power as China’s regulatory agency and industrial policy maker, is widely known as an obstacle to reform. This is the bureaucracy that has consistently favored state-owned enterprises at the expense of private entrepreneurs. In recent years, many of its initiatives, such as the push into clean energy and semiconductors, have been financial flops. To revive China’s economic reform agenda, the new leadership should dismantle this super-ministry, or at least downsize its clout significantly.

The only good news coming from the pending bureaucratic restructuring is the near certainty of the end of the one-child policy. With the demise of the national family planning commission, advocates of China’s self-destructive one-child policy will no longer have an institutional base. It seems that China’s leadership has reached a consensus to significantly relax the nation’s draconian family-planning rules.

Another drama worth watching: When the National People’s Congress formally concludes, it will unveil the government’s new cabinet. While we know for sure that Li Keqiang and Zhang Gaoli will be, respectively, the next premier and executive vice premier, we can only guess who the other key economic officials will be. Of the most interest to the international business community will be the two new vice premiers who will oversee China’s energy, transportation, industry, foreign trade, and finance.  Wang Yang, the former party boss of Guangdong province who has been labeled a “reformer” and Ma Kai, the former chairman of the NDRC, are said to be the party’s choices for the two slots. It’s unclear who will get which portfolio. The more important policy-making portfolio is that of energy, transportation, and industry. Based on the rumor mill, it seems that Ma will get this assignment perhaps because he had once led the NDRC (which regulates these sectors) even though Wang Yang has more political seniority (by virtue of being a second-term Politburo member).

If this is the case, those expecting more dramatic reform of the state-owned enterprises may be disappointed. Had Wang been selected to oversee these sectors where state-owned enterprises dominate, he could have exerted greater pressure for reform (if he is as reformist as the media claims).

The incumbent governor of the People’s Bank of China (the central bank), Zhou Xiaochuan, is likely to stay on for a few years even though he has reached retirement age (65) and did not get a slot on the party’s Central Committee last November. As a capable and respected central banker, Zhou’s continuing presence will likely reassure the markets. Although he is unlikely to serve out another five-year term (since Beijing has selected the current chairman of Bank of China to be the party secretary of the central bank, effectively designating him as Zhou’s successor), Zhou could play a very influential role in guiding China’s financial sector through a period of turbulence ahead: It is widely expected that in the coming years China will have to confront the accumulated bad loans in its banking sector and the difficult task of financial liberalization.

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The government will also announce its finance minister appointment at the end of the congress. The person picked for this spot is Lou Jiwei, currently chairman of China Investment Corporation (the sovereign wealth fund). A bright, capable, and straight-talking technocrat, Lou is an excellent choice for this position since China urgently needs to reform its dysfunctional fiscal system. A protégé of former premier Zhu Rongji, Lou once served as the executive vice minister of finance and played a key role in China’s 1994 tax reform. He’ll now need to change the system he helped put in place.

For skeptics, the proceedings at the National People’s Congress are unlikely to provide any convincing evidence of the new leadership’s commitment to reform. The signals are mixed. The business community will have to continue to put Beijing on probation and pay more attention to what the new leaders do, not what they say.

Minxin Pei is the Tom and Margot Prtizker ’72 Professor of Government at Claremont McKenna College and a non-resident senior fellow of the German Marshall Fund of the United States.

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