Big hopes on Third Plenum for reform

Bourses in Shanghai, Hong Kong and Shenzhen would probably enjoy a period of robust business in the run-up to Beijing's major high-level conference to decide China's next round of reforms, which is scheduled for mid-November.

The conference is called the Third Plenum of 2013, which is the short form of a very long name: The Third Plenary Session of the 18th Central Committee of the Communist Party of China.

It was the Third Plenum of 1978 that initiated the economy's structural reform. So it is both ritualistically and realistically important to dedicate every Third Plenum (recurring usually every five years) to the sacred cause of reform. And the most convincing way to do it is to inject fresh ideas into a new reform program.

Members of China's present leadership nucleus, especially President Xi Jinping and Premier Li Keqiang, have pledged repeatedly that they will make a good effort at reform.

Expectation is running high that the 2013 Third Plenum will result in much stronger headway for reform than people can remember seeing in the past decade.

In the short term, things may get really exciting, especially as the economy's third-quarter results, released on Friday, showed better growth in industry, investment and retail than in the previous two quarters.

In the longer term, however, not all industries will post equally exciting results. Picking worthy investment targets will remain a tricky game.

The "economic transition" that the government talks about is not just a slogan. It is a reality based on the fact that the previous way of building up the economy, which relied on heavy energy and heavy investment, has simply run to the wall or, as described by Chinese officials themselves, has become unsustainable.