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China leader promises 'unprecedented' reforms

Saturday, 26 Oct 2013 | 7:57 AM ET
A policeman patrols under a giant communist emblem on the Tiananmen Square on June 28, 2011 in Beijing, China.
Getty Images
A policeman patrols under a giant communist emblem on the Tiananmen Square on June 28, 2011 in Beijing, China.

A top Chinese leader has promised "unprecedented" economic and societal reforms at the Communist Party's much anticipated plenum meeting next month, state media reported on Saturday.

Yu Zhengsheng, the fourth-ranked member in the elite Politburo Standing Committee of the Communist Party, said the closed-door meeting would "principally explore the issue of deep and comprehensive reforms".

"The reforms this time will be broad, with major strength, and will be unprecedented," he said, according to the official Xinhua news agency.

"Inevitably they will strongly push forward profound transformations in the economy, society and other spheres."

Yu's comments are among the first from China's top leaders about the plenum, where President Xi Jinping is expected to press for greater economic reforms.

The broad reform agenda is expected to steer the world's second-largest economy, which is experiencing slowing growth, from a reliance on debt-fuelled investment to a more balanced model driven more by consumption, services and innovation.

The meeting will mark the third time China's elite 200-member Central Committee has gathered since a leadership transition last year.

Historically, third plenums in China have served as a springboard for key economic reforms. Political reform is not expected to be a major point of discussion.

China's cabinet has called for greater effort in revamping the economy because a recovery is not yet solid.

China's $8.5 trillion economy grew at its fastest pace this year between July and September in a rebound fuelled largely by investment, although signs are already emerging the pick-up in activity may lose some vigour. China still expects to meet its economic targets for this year, including growth of 7.5 percent.

China this week launched a new benchmark lending rate, aimed at letting markets set the cost of funds and reducing distortions that have led to excessive investment and overcapacity now dogging the economy.

At the plenum, the reform agenda is likely to feature financial and tax reforms, but may also address persistent issues such as hastening urbanisation through land reforms and liberalising China's household registration system, which restricts migration between rural areas and cities.

Critics have said that vested interests, especially state-owned enterprises, could stymie reforms.

Former leader Deng Xiaoping launched historic reforms at the third plenum of the 11th party committee in 1978 to rescue the economy from the verge of collapse after Mao Zedong's disastrous Cultural Revolution.

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