China's Communist Party starts economic reform meeting

BEIJING - China's ruling Communist Party commenced a key meeting Saturday focused on economic reforms, state media reported, a year after a closely watched leadership transition.

The official Xinhua news agency said in a short dispatch that the gathering had begun and would discuss a draft decision by the party Central Committee on "major issues concerning comprehensively deepening reforms".

The four-day session of the full 376-member committee is believed to be taking place at a closely guarded private hotel in Beijing and concludes Tuesday.

Security in the form of uniformed and plainclothes police was tight Saturday morning as a stream of black sedans with tinted windows could be seen entering the venue.

Police were preventing vehicles with non-Beijing license plates from proceeding on the city's main thoroughfare toward the hotel, according to an AFP photographer at the scene.

The meeting comes less than two weeks after a fiery vehicle crash in front of Tiananmen Square, the symbolic heart of the Chinese state, that killed two tourists and wounded dozens.

The government has described the incident as "terrorism" and blames separatists from Xinjiang, the far-western province home to the mostly Muslim Uighur minority.

The party gathering, known as the Third Plenum, has traditionally set the economic tone for a new government.

In the past, such meetings have been used to signal far-reaching changes in how China does business.

Last November, China began a once-a-decade leadership makeover as Xi Jinping took over as party general secretary before becoming state president in March.

The official Xinhua news agency proclaimed that the plenum "is expected to be a watershed as drastic economic policies will be unveiled".

Other reports have singled out land reform as a key issue, while a government think-tank called for dismantling the residency registration system known as hukou, which restricts access to medical insurance and other benefits for migrants.

Analysts, however, have expressed scepticism and say broad brushstrokes rather than firm details are more likely to emerge from the meeting.

"Expectations are not very high for the economic reform blueprint which will be spelt out at the plenum," Willy Lam, an expert in Chinese politics at the Chinese University of Hong Kong, told AFP.

"This is because Xi Jinping has emphasised the values of stability and also incremental changes."

China most notably signalled major reforms at a Third Plenum in 1978, when it embarked on the landmark drive that has seen it transformed over the past three decades from a Communist-style command economy into a key driver of global growth, trade and investment.

Although the economy is no longer completely party- and state-controlled, the ruling body holds huge sway, with officials in charge of key elements, such as the exchange rate, that in other countries are left mostly to markets.

China's leadership recognises that the country's economic model largely based on state-financed investment needs to give way to one in which consumers and other private actors propel growth.

But changing direction in the world's second largest economy is no easy task given entrenched interests and ways, as well as its increasing complexity.

"Intellectuals in Beijing are not very optimistic that the reforms introduced at the weekend will be as forward-looking and sweeping as those introduced by Deng Xiaoping 35 years ago," Lam said.

The People's Daily newspaper, the official party mouthpiece, firmly rejected Western-style political reforms on the eve of the meeting.

The party "must uphold its leadership... in the face of some people in society who advocate imitation of the Western system," the paper said Friday in a full-page editorial. 

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