adminBeijing. – China’s quick release of a surprisingly detailed national reform plan shows leaders are serious about economic change, analysts say, but uncertainties remain over its implementation.
Just days after the end of a closely watched Chinese Communist Party meeting, the ruling body added weight to the framework for change in the world’s second-largest economy. Reforms approved at the Third Plenum meeting, a year after the party revamped its top leadership, include requiring powerful state-owned companies to pay larger dividends to the government to beef up a weak social security system.
China will also encourage a bigger role for the private sector, further champion interest rate reform, loosen currency controls and allow farmers more room to profit from state-owned land they currently till on contract, according to documents released by state media.
“The new leaders really delivered and promised a number of concrete changes,” Hong Kong-based Societe Generale economist Yao Wei wrote in a report.
The lengthy and detailed final “decision” document released late on Friday was “encouragingly specific” compared with the initial communique three days earlier, she wrote. State-owned businesses will have to pay 30 percent of their profits into the Social Security Fund by 2020, up from a current maximum of 20 percent, and Yao said: “This ratio may not impress everyone, but it is laudable that the leaders are willing to set this target explicitly.”
While analysts mostly expressed pleasant surprise at the final plan’s contents, they stressed its ultimate success can only be judged based on implementation, which will be complex.
Online Reporter