A bold reform proposal co-authored by President Xi Jinping's economic adviser has intensified speculation on the scope of policy changes to be unveiled at a key meeting of the Chinese Communist Party (CCP) next month.
In its report, viewed by some as a roadmap for reforms at the CCP's third plenum, the Development Research Centre (DRC) called for the household registration, or hukou, system to be abolished to speed up urbanisation.
The controversial system, which ties welfare benefits to a Chinese citizen's birthplace, should be replaced with a "basic social safety package", including pension and medical insurance, said the state-run think-tank in its report released at the weekend.
The change will promote free migration of people, "ensuring basic social benefits for citizens, optimising the distribution of resources and the improvement of productivity", said the DRC, the research arm of the State Council, China's Cabinet.
Other proposals include breaking up state monopolies and opening up key industries to foreign and private investors, and introducing a "clean pension" scheme for officials who have not broken any rules or laws.
The DRC also called for farmers to be allowed to sell land collectively to property developers in return for adequate compensation. Existing regulations give farmers the right to use land but forbid them from selling it, resulting in land grabs by local governments, which buy at low prices to re-sell at much higher prices.
Hong Kong-based economist Dong Tao of Credit Suisse bank said in a note that the DRC's proposals are part of "probably the most ambitious" economic initiatives since the People's Republic of China was founded in 1949 and should be viewed as the foundation of Mr Xi's reform framework at the third plenum. The event - the third full meeting of the CCP's 18th Central Committee - is set to take place next month, although no dates have been fixed.