(MENAFN- Khaleej Times) In the biggest expansion of economic freedoms since at least the 1990s, China's leaders vowed to expand farmers' land rights, loosen the one-child policy and encourage private investment in state businesses.
Couples can have two children if either parent is an only child, the Communist Party said in a statement fleshing out policies set at a four-day conclave this month. Farmers will get more rights over collectively owned rural land, while the household registration system that impedes internal migration will be scrapped in towns and small cities.
The new leadership of President Xi Jinping and Premier Li Keqiang, installed in March, is accelerating an unwinding of Communist Party economic policies that originated during or shortly after the reign of Chairman Mao Zedong. The party needs to fuel growth to cement its grip on power in the face of economic headwinds ranging from local-government debt to an ageing population that is set to shrink the nation's workforce.
"The bottom line is that there's a sweeping reform plan," said Wang Tao, a Hong Kong-based economist for UBS who formerly worked for the International Monetary Fund. "At least from the blueprint, it seems very exciting."
The family-planning policy, put in place three years after Mao's death in 1976, was intended to alleviate poverty. It has saddled the nation with a declining labour force: The United Nations estimates that the number of 15- to 24-year-olds, the mainstay of factories that drove growth for two decades, will shrink by about 67 million by 2030. Under the current policy, couples are only allowed to have a second child if both parents are only children.
Changes to the policy will help maintain a reasonable size of the labour force, slow the speed at which the country's population is aging and boost the economy, Wang Peian, deputy director of the National Health and Family Planning Commission, said in a statement on the central government's website on Saturday. At the same time, "not too many" couples fulfill the new criteria and the change won't lead to a large increase in the population in the short term, Wang said. The number of people in China in 2020 will still be "significantly" below 1.43 billion and the expected peak population will be well below 1.5 billion, Wang said. A 2010 census put the figure that year at 1.34 billion.
China's stocks rose ahead of Friday's release, capping the benchmark index's biggest gain in a month, on speculation about the reform document. The Shanghai Composite Index climbed 1.7 per cent, while yields on the nation's 10-year notes increased to the highest level since 2007.
The document, covering 60 measures, adds details to a communique issued on November 12 after a four-day party meeting known as the third plenum and sets a 2020 goal for implementation.
"Now it's going to be the hard and complicated slog of implementation," said Stephen Green, head of Greater China research at Standard Chartered in Hong Kong.
Former central bank adviser Li Daokui said that a planned scaling back of hukou, the household registrations that limit labour mobility, will be the biggest change to that policy since it was established in 1958 under Mao"
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.