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China's reforms focus on easing grip on market, boosting Xi's power

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(Globalpost/GlobalPost)

BEIJING, Nov. 16 (Yonhap) -- A raft of far-reaching reform measures unveiled by China's Communist Party, which set the course of its reform agenda for the coming decade, focused on loosening the party's grip on the nation's economy, while reinforcing the power of President Xi Jinping.

The reform measures, including pledges to loosen the decades-old "one-child" policy and abolish labor camps, were approved by the party's key policy meeting, known as the "Third Plenum," which ended earlier this week.

Xi, who took office in March, has pledged to stabilize economic growth while pressing ahead with reforms at a time when the world's second-largest economy has shown some signs of losing growth momentum.

The Communist Party on Friday released a long statement of over 20,000 Chinese characters listing 60 reforms in 16 areas, about half of which are related to the economy.

Reducing the government's intervention and letting the market play a "decisive role" are two key points of the reforms, according to the state-run Global Times newspaper on Saturday.

China will also push for "market-driven" pricing reforms on water, oil, natural gas, electricity, transportation and telecommunications, it said.

China's state-owned enterprises (SOEs) will be allowed to have 30 percent of their profits allocated to social security funds by 2020, from the current zero to 15 percent.

That means "the public can share a big chunk of the cake owned by giant SOEs with lucrative profits such as PetroChina and the Industrial and Commercial Bank of China," Xu Hongcai, director of the Department of Information at the China Center for International Economic Exchanges, told the paper.

In a move expected to boost Xi's grip on power, China will establish a nationwide security council called the National Security Commission.

While it is still unclear how the commission will operate, experts have said it will serve as a control tower for various security-related departments, including military, police, intelligence and diplomatic services as well as financial services.

"Establishing a national security commission to strengthen the unified leadership of state security work is an urgent need," Xi was quoted as saying by the Xinhua news agency on Friday.

Besides domestic security affairs, the new security commission is also expected to handle international security issues including North Korea and China's territorial disputes with Japan and other Asian nations, experts said.

When it comes to the economic reforms, a key point will be whether the Chinese government could handle its relations with the market, Zhang Monan, an associate research fellow with the China Center for International Economic Exchange, said in his op-ed piece published by the China Daily on Saturday.

"Despite a strong signal for sweeping self-reforming measures, whether the Chinese government can really define its relations with the market and delegate more of the responsibilities it has exercised in the past to the market and non-government players will remain the key to success," Zhang said.

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