China announces unprecedented economic reforms after Third Plenum

BEIJING - Reform measures outlined in documents released on Friday night indicate that decisions taken by the 3rd Plenum of the Chinese Communist Party are unprecedented and way above market expectations, ANZ Bank says in a client note. The document outlines major policy reforms that will take place soon, and which will have a major impact on China’s economic developments in the next five to 10 years. 

“China’s top leadership pledged to remove privileges granted to the State-owned enterprises, remove barriers to competition, use the markets to price factor prices, accelerate deregulation of interest rates and capital flows, lower curbs on foreign investment, reform the fiscal system and grant local governments the right to issue bonds,” ANZ says.

“We believe all these reform measures will expand the role of the markets, enhance more efficient allocation of resources, and lift productivity growth. These groundbreaking reforms will substantially reduce the downside risks in China’s economy. If implemented masterfully, we have no doubt China will return to a sustainable growth path. www.live.anz.com (ATI).