China vows to unleash deep market-oriented reforms in new policy directive as economic uncertainty grows
- The Chinese Communist Party has vowed to deepen market-oriented reform in key sectors of the economy, from land management to labour
- Policy comes as China faces increasing headwinds, including the possible realignment of global value chains after the coronavirus pandemic
China has vowed to further liberalise its economy from land to labour in a new reform paper, as the country readies itself for an increasingly uncertain outside world.
The new policy guidelines, released by the Communist Party Central Committee and the State Council on Thursday, aim to facilitate the flows of “production factors” – namely land, labour, technological knowledge, capital and data – by letting the market rather than the state decide where resources should go, according to the official Xinhua news agency.
China will ensure different market players have “equal access” and seek efficiency by following “market rules, market pricing, and market competition”, according to the new policy guidelines, which still need to be passed into law.
To cope with the huge uncertainty in the external environment, China needs to open up fresh growth potential and unleash the ‘reform dividend’
Zhou Li’an, professor of applied economics at the Guanghua School of Management at Peking University, said the new guidelines could clear up doubts about the fate of China’s future economic direction, including whether it can “continue to maintain growth”.
