Nov. 15 – China’s central government released the much-anticipated communiqué of the Third Plenum of the 18th Central Committee of the Communist Party (hereinafter referred to as the ‘Communiqué’) on November 12, which is the first policy blueprint unveiled by the new leadership under President Xi Jinping and Premier Li Keqiang.
The Communiqué changes the role of market economy from “basic” to “decisive,” stipulating that the country will deepen its economic reform to ensure that the market will play a decisive role in the allocation of resources. Meanwhile, it pledges to achieve clear accomplishments in major fields and build a sound, scientific and effective institutional system in all areas by 2020.
However, unlike what many have expected, the Communiqué hasn’t put forward any specific details concerning future reforms, and has instead painted rather broad policy directions. It is expected that more specific policy measures will be announced in the coming months.
Highlights of the Communiqué are hereby summarized as below:
Establishing two national organs
- Setting up a National Security Committee to perfect national security systems and strategies; and
- Setting up a leading committee on comprehensive reforms at the central level to take charge of the general planning of reforms, comprehensive coordination, overall direction and supervision of implementation.
Establishing a unified, open, competitive and ordered market system
- Accelerating the formation of a modern market system in which enterprises can make their own business decisions, while fair competition, consumers’ free choice, autonomous consumption, free flow of products and factors, and equal exchange will be encouraged;
- Striving to eliminate market barriers and improve the efficiency and fairness in resource allocation; and
- Creating a set of fair, open and transparent market rules and perfecting a mechanism under which prices are largely decided by the market.
Integrating urban and rural development
- Formulating a new type of “industry promotes agriculture, cities lead the countryside” relationship; and
- Creating a new type of agricultural management system and endowing farmers with more property rights, so as to realize the equal exchange of urban and rural production factors and achieve a balanced allocation of public resources.
Adapting to new trend of economic globalization
- Promoting the orderly and free flow of international and domestic production factors and relaxing investment entry requirements; and
- Accelerating the construction of free trade zones and deepening the opening-up level of inland and coastal areas.
Building a nation ruled by law
- Deepening judicial structural reform and accelerating the construction of a fair, highly-efficient and authoritative socialist judicial system;
- Deepening the administrative law enforcement reform to guarantee that judicial and prosecutorial power is exercised independently and fairly according to the law; and
- Perfecting judicial systems to guarantee human rights.
Locking up power in a “cage of rules”
- Improving systems to fight against corruption, so as to construct a clean government;
- Creating scientific and effective mechanisms to restrain and coordinate power; and
- Innovating anti-corruption systems and mechanisms.
Sharing the “fruits of economic growth”
- Resolving issues that the masses are most concerned about, so as to better satisfy people’s demands;
- Deepening comprehensive reform in the area of education;
- Improving systems and mechanisms to stimulate employment and entrepreneurship;
- Creating a rational and orderly income allocation structure;
- Establishing a fairer and more sustainable social security system; and
- Deepening structural reform in the medical and healthcare sectors.
Building an ecological society
- Establishing a systematic and integral ecological societal system;
- Improving the natural resource property rights system and usage management system;
- Implementing the compensated-use of natural resource system; and
- Reforming the ecological and environmental protection and management system.
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