China's third plenum

Party to flesh out reform promises by releasing full version of third plenum communiqué

Full version of third plenum communiqué is expected to be published within days, giving more detail of measures to sustain economy

PUBLISHED : Friday, 15 November, 2013, 3:50am
UPDATED : Tuesday, 23 January, 2018, 11:45am

Beijing is expected to release the full transcript of a key policy document signed off at the Communist Party's third plenum within a week after the meeting ended.

Detailed reforms aimed at sustaining economic growth would be unveiled in the full version of the communiqué, said Zhang Zhuoyuan, who helped draft the document.

"China will accelerate the reform of the exchange rate," Zhang said, adding that the full version of the communiqué would also mention the controversial property tax.

The vaguely worded communiqué, released on Tuesday night after a four-day meeting of nearly 400 top leaders, failed to impress.

Mainland and Hong Kong stock markets slumped the next day. But Zhang, an economist at the Chinese Academy of Social Sciences, said that while the communiqué "briefly touched" on the reform topics, the full version would be more specific.

Guan Qingyou, a vice-director of research at Minsheng Securities, said the full transcript would be released next Tuesday.

This week's communiqué was seen as long on goals but short on details. The markets had hoped for the faster deregulation of interest rates and the exchange rate and the opening-up of the capital account.

But the 5,000-word document mentioned the word "financial" only once - in a terse sentence that the government would strive to "improve financial markets". Zhang said the "top-level design" of reform would be made public soon. "The party will ensure the reforms are implemented, instead of just paying lip service."

Shen Jianguang, an economist at Mizuho Securities, agreed. "Although the communiqué appears to contain few details on financial markets, I don't think this means the pace of the reform will stall," Shen said.

Beijing has basically deregulated lending rates and allowed deposit rates to float 10 per cent higher than benchmark figures.

The yuan is convertible under the current account - which includes dividends, trade and service-related currency transactions - but not totally under the capital account, which includes foreign direct investment.

The yuan exchange rate has been allowed to trade one per cent each side of a daily rate set by the central bank since April last year, widening from 0.5 per cent.

Yi Gang, a vice-governor of the central bank, pledged earlier this year that the daily trading band would be further expanded.

Guo Tianyong , a professor at the Central University of Finance and Economics and head of its banking research centre, said Beijing would completely liberalise deposit rates in about three years, starting with large amounts in the form of certificates of deposit.

A deposit insurance system, protecting investors when banks collapse, would be launched soon and the nation's first privately owned banks under President Xi Jinping's administration would be set up as early as this year, Guo said.

"The capital account will be the last financial area to be reformed, as many officials regard it as highly risky. Even though the Shanghai Free-Trade Zone may open up the capital account to some extent, it will hardly be fully opened."

Additional reporting by Keith Zhai and Victoria Ruan