Xi Jinping: China leader vows to push bold economic, social reforms

Chinese President stakes political legitimacy on key changes

IN AN ambitious new road map for reforms in the next decade, the ruling Chinese Communist Party (CCP) pledged to implement wide-ranging economic and social reforms, which would see a relaxation of the country's one-child policy and allow market forces to play a bigger role in the economy.

Some changes include those which Beijing has resisted for decades, such as abolishing the controversial labour reform camps.

On the other hand, Beijing also signalled its intention to tighten Internet controls which President Xi Jinping said could affect national security and social stability.

The announcement came days after a policy summit where Mr Xi appeared to have gained greater power and clout.

In a first, Mr Xi, who took power last November and is set to lead China till 2022, also issued a note explaining the need for the key reforms, effectively staking his political legitimacy on them.

"Looking ahead, if we want to solve our various developmental challenges and address challenges and risks from all sides, we have no choice but to further deepen our reform and opening up."

His note was released yesterday by Xinhua news agency, along with a 22,000-word document, known as "decisions" in short, as it detailed the reforms approved at the Third Plenum, or the third full gathering of the Central Committee, which ended on Tuesday.

A 5,000-word communique issued on Tuesday led to slumped markets disappointed with the lack of details. But yesterday, a leaked copy of the "decisions" on social media fuelled the biggest stock market rally in two months.

Analysts say it could be the first time a CCP general secretary is personally explaining the decisions.

Said Wuhan University analyst Qin Qianhong: "In doing so, the message from Xi is that he wants reforms and he will dictate the reforms in the next 10 years."

Observers say Mr Xi's note also confirms that he is set to helm a small leading group on the "comprehensive deepening of reforms", one of two party panels unveiled by the plenum. Another is the "state security committee", also set to be led by Mr Xi.

The CCP aims to "achieve decisive results by 2020" in the wide- ranging reforms, but no detailed timeline was given.

A key move at the plenum was to elevate the role of the markets in the economy from "basic" to "decisive", a point reiterated in the "decisions" document as it fleshed out details on the rolling back of the state presence.

For instance, 30 per cent of gains from state-owned capital will have to go to the government, up from the current zero to 15 per cent, so as to "improve people's livelihood", reported Xinhua.

Shenzhen University analyst Ma Jingren said the new leadership has no choice but to act because of the demands from a market economy for strong rule of law, cutting of red tape and a more mobile labour force.

"After decades of work, we have built up a strong foundation in these areas and are ready to further reforms. The leadership is showing the people that they can be confident in a bright future."

But Professor Qin thinks the new leadership is taking significant risks in giving Mr Xi so much power and in pledging ambitious reforms in its first year.

"It reflects the frustration with the lack of progress in the past 10 years under the Hu-Wen leadership," he added, referring to former president Hu Jintao and former premier Wen Jiabao.

"But the opposition that Xi faces from the vested interest groups far exceeds those that Deng Xiaoping faced. If Xi fails, his legacy may be affected."

kianbeng@sph.com.sg

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