Hopes Beijing summit will herald economic reform

CHINA’S leaders have begun a four-day meeting to determine the country’s economic and political agenda for the next decade.

Yu: unprecedented reforms. Picture: Getty

State news agency Xinhua said leaders would be discussing “major issues concerning comprehensively deepening reforms” at the event, which started yesterday in the capital, Beijing.

Among the areas to be discussed at the secret talks are liberalising the financial sector and state-owned enterprises and reforming China’s household registration system.

The meeting is being closely watched by political analysts after senior Communist Party official Yu Zhengsheng revealed last month “unprecedented” economic and social reforms would be discussed there.

It also comes after a report released by the development research centre of the state council, a state-affiliated think tank, called for three broad areas and eight key sectors for reform. The centre’s plan – which has become known as the 383 plan – has called on China’s leaders to liberalise the market, encourage competition, and increase government transparency.

The meetings are commonly known as “third plenums” – which refer to the third time new leaders of China lead a plenary session of the central committee.

They typically take place a year after new leaders take office, after they have established their power base, and previous third plenums have had a major impact on China’s development.

At the third plenum in 1978, former leader Deng Xiaoping announced the opening-up of China’s economy, spearheading major market-oriented reforms.

In 1993’s third plenum, former leader Zhu Rongji announced the “socialist market economy” and dismantled a large part of China’s state-owned sector.

Mark Williams, chief Asia economist for Capital Economics, said reform advocates are looking to China’s leaders to launch a new era of change by giving entrepreneurs a bigger role in the state-dominated economy and farmers more control over land.

He said: “Smaller, more efficient, firms are starved of credit. They don’t get the same breaks in terms of cheap land, cheap energy that the better-connected state firms get.

“The result is that the economy is less efficient than it would be otherwise.”

However, Williams warned that where economic or social reforms are agreed, local officials and groups with vested interests may be reluctant to implement them.

Security is tight in Beijing ahead of the meeting, with tensions higher than usual in the wake of last week’s incident in Tiananmen Square.

Five people were killed in what Chinese officials called a “terrorist attack” incited by extremists from the western region of Xinjiang when a car drove through crowds and burst into flames.