Expectations are high for far-reaching economic reforms at a key policy meeting of China's leaders this weekend. But so is the scope for disappointment, analysts say.
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China's president Xi Jinping has promised a comprehensive reform plan at a four-day plenum of the Communist Party that begins on Saturday, according to local media reports.
The meeting is significant because it will be the first real opportunity for Xi to outline his economic agenda one year after a once-in-a-decade leadership change in the world's second biggest economy took place.
Add to that the historic significance of the plenum – it has marked a turning point for major policy shifts in the past such as in 1978 when Communist Party leader Deng Xiaoping unveiled reforms that led to the opening up of the economy and paved the way for three decades of rapid economic development.
"I think the plenum could be far-reaching and I think it could be profound. But note that there is a three-to-five year time horizon attached to the bulk of these reforms," said John Woods, head of fixed income and senior portfolio manager at Citi Investment Management.
Analysts say a report released last week by China's Development Research Centre (DRC), a think-tank linked to the State Council – the equivalent of China's cabinet – provides some idea of the reforms that could be outlined at the plenum.
The DRC recommended creating a national social security system and making changes to state-owned enterprises. It also recommended an equal valuation of urban and rural land, saying that the current structure had distorted prices.
According to Credit Suisse the changes proposed by the DRC report could "potentially be revolutionary."
Expectations for sweeping change were also lifted last week when Yu Zhengsheng, China's fourth-ranked politician, promised "unprecedented" reforms at the plenum.
"We believe the reform framework proposal revealed by the Development Research Centre should be viewed as the foundation of Xi's framework of reforms," Robert Prior-Wandesforde, director for non-Japan Asia economics at Credit Suisse, said in a note.
"We have high hopes that Xi will deliver an ambitious reform guideline. To go from reform architecture to detailed policy design and execution, the ball will need to be moved to the bureaucrats' court. The success of the ambitious reform package would depend on details and execution, in our view," he added.