Radical rural reform to be discussed by leadership

PUBLISHED : Tuesday, 07 October, 2008, 12:00am
UPDATED : Tuesday, 07 October, 2008, 12:00am

A rural reform plan to be introduced at a gathering of the Communist Party elite this week would have far-reaching effects on the country's development, the official Outlook magazine said yesterday.

The party's Central Committee will hold a plenary session from Thursday to Sunday. Under China's one-party system, the meeting will be the most important political event of the year, where key issues will be discussed and important personnel changes made.

This week's plenary session, the third since last year's leadership reshuffle, would be particularly important as it would decide China's economic direction, Outlook quoted several senior party thinkers as saying.

'Throughout the party's history, important economic policies and decisions are always made at the third plenary session,' said Ye Duchu , a professor at the Central Party School. 'The first and the second plenary are mostly for personnel reshuffles and to unify the minds of party members. The central leadership will often unveil its policy focus at the third plenary.'

The magazine said the leadership would introduce a new round of rural reforms at this week's meeting which would have great impact on China's economy. It gave no further details.

Chang Xueze , a professor with the National Development and Reform Commission, told the magazine: 'Reviving the rural economy holds the key to China's next stage of development. It is the new focus as well as the bottleneck of our country's next round of reforms.' While China has undergone rapid industrialisation and urbanisation in the past three decades, development has become increasingly lopsided. The urban-rural wealth gap continues to grow, and the economy still relies heavily on exports.

'Our rural economy is facing many challenges and difficulties. The situation has been particularly challenging since last year, as rising production costs and outdated policies have affected the rural economy's development,' the report said.

A strong rural economy could help China ride out the global financial storm, some analysts said. As the global economy slows, China needs to cut its reliance on export-oriented industries and shift focus to domestic consumption and investment.

One of the key initiatives in the upcoming reform plan will be land reform. Party leaders are expected to review the amendment of a land management law to give rural people more freedom to trade rights to their non-farming land, according to an earlier mainland media report.

Another report suggested that the reform would address the shortcomings of the household responsibility system, introduced 30 years ago in a revolutionary move which kick-started China's economic modernisation.

Under the system, small and often scattered pieces of farmland were allocated to individual households to restore incentive.

But the move also reduced the scale of agriculture and the level of mechanisation.