China embarks on era of key reforms

A general framework for future growth charted at a recent key plenum of the Central Committee of the Communist Party of China (CPC) ushered in a major phase of comprehensive and deeper reforms for the world's second largest economy.

Since the start of 2013, China's economy and related policies have been a global focus and overseas institutions and experts are closely following the situation all year through.

A recent HSBC survey showed that China's composite purchasing managers' index (PMI), covering both the manufacturing and service sectors, rose to 52.3 in November from October's 51.8, the strongest expansion in eight months.

Credit ratings agency Standard &Poor's (S&P) also issued a report on the Chinese economy, predicting future economic changes after the third Plenary Session of the 18th CPC Central Committee earlier in November.

Economic and political developments in the next two to three years were likely to maintain China's current credit rating of AA- on its long-term sovereign debt, as structural economic reforms could reduce risks in the financial sector, the agency said.

In a highly integrated world, China's economic trends in the forthcoming year will inevitably draw global attention.

Nicolas Baverez, a French economist, wrote in an article published in daily newspaper Le Figaro that an aging population and the crisis of global capitalism demanded both developed and developing nations rebuild their development models.

China should carry out reforms to keep its position as the world's second largest economy, he said.

Indeed, driven by a sense of necessity and urgency, Chinese policymakers have started a new round of reforms.

According to a statement following a Political Bureau meeting presided over by General Secretary of the CPC Central Committee Xi Jinpingearlier this week, China will continue to maintain consistency and stability in its macro-control policies next year.

At the meeting, China's top leaders highlighted the role of reform in planning economic growth for 2014, ahead of a key economic meeting later this month.

The country will seek steady and stable growth next year, pushing reforms through in all areas of the economy and society and speeding up economic restructuring and public service infrastructure development, the statement said.

Foreign media said the statement demonstrated Chinese leaders' clear understanding and deep thinking on various aspects of reform. Many overseas observers also noticed China had launched reforms in some key areas, with an increasing convergence of economic achievements and the country's policy objectives.

"Most importantly, economic outcomes are becoming increasingly aligned with the authorities' goals," William H. Overholt, a senior research fellow with John F. Kennedy School of Government's Ash Center for Democratic Governance and Innovative at Harvard University, wrote in an article titled "China's New Reforms in Theory and Practice."

"Services already account for more output and employment than industry -- the Internet company Alibaba, for example, is empowering both consumers and smaller companies on a previously unimaginable scale -- and recent growth has been driven by domestic demand rather than net exports," the article read.

However, as Baverez said in his article, China still faces some huge challenges in its reform process, including its aging population, uncertainty in urbanization, mounting personal debt, imbalanced development, environmental protection and corruption.

But, thanks to the Chinese leadership's firm determination for reform and wisdom, the Chinese economy will maintain stable momentum for growth in the future.

As Overholt put it, "reform is not just a plan; it is already happening."