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China to relax one-child policy as part of reforms: Reports

Ed Jones | AFP | Getty Images

China is to loosen its controversial one-child policy and allow couples to have two children if one of the parents is an only child, Chinese state media reported Friday.

The policy shift announced Friday is one of several key decisions approved by the Communist Party of China (CPC) at its historic and secretive Third Plenary Session earlier this week.

The CPC said the change in family planning policy was intended to promote "long-term balanced development of the population in China," according to the state-run Xinhua news agency.

(Read more: Asia's aging crisis explained in one graphic)

Under the current law, couples living in Chinese cities can only have two children if neither have any brothers or sisters.

Among the package of reforms, the CPC also announced the abolition of the "re-education through labor" system, in what Xinhua said was a bid to improve human rights.

(Read more: Too soon to dismiss China's 'vague' plenum?)

The labor-camp system was designed to punish early critics of the Communist Party, but it is now used by local officials to deal with people who challenge the state on rights issues and corruption, the Associated Press said.

The state will also reduce the number of crimes punishable by death, "work to ban" getting criminal confessions through torture, and improve the judiciary system.

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The main economic reform in the bundle was a proposed change to the country's tightly-controlled banking sector, allowing the establishment of small and medium-sized private banks.

China's ruling party agreed the roadmap at the Third Plenum of its 18th Central Committee earlier this week. This secretive four-day meeting was the first opportunity the year-old administration led by Xi Jinping has had to set its policy agenda.

(Watch This: China plenum to'surprise' on reforms: Stephen Roach)

The third plenary session of each new central committee has added historical significance as it was the meeting in which Deng Xiaoping adopted the open-door policy in 1978, and China entered the World Trade Organization (WTO) in 1993.

Following the announcement, a senior U.S. Treasury official told Reuters that China's leaders had shown that they were committed to market-based reforms, but that they faced a test in trying to deliver results.

"I think there is going to continue to be progress, but the question is how much and how quickly," said the official.

"The direction is significant, but the character and the pace of change matters."

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