China To Ease One-Child Policy

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BEIJING—China's leaders agreed to loosen the nation's one-child policy and to give market forces a greater role in the world's No. 2 economy, according to new details of a blueprint for reform released on Friday.

The proposals follow the end on Tuesday of a four-day meeting of top Chinese Communist Party leaders, and they represent the first comprehensive road map for reform under new Chinese President Xi Jinping.

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A newborn baby lies on a scale at a hospital in Suining, southwest China's Sichuan province. Reuters

While a preliminary summary of the meeting released on Tuesday was vague, the more-detailed document released on Friday sketches an ambitious reform program designed to address problems that China faces: maturing growth, rising worries about a wide wealth gap and endemic pollution, and increasingly vocal criticism of Beijing's handling of a number of social issues.

"More attention also needs to be paid to employment, income levels, social security and people's health," the document said.

The test now for Mr. Xi and China's leaders will be how to implement many of its goals, including whether they will be introduced in coming months or will be introduced more gradually. The leadership is likely to face resistance ranging from state enterprises and the bureaucracies that oversee them to local governments, which have been frustrated by attempts at piecemeal reforms in recent years. A special leadership committee to oversee reform, which was announced previously, is supposed to address possible resistance, though the document provides few details on how it will do so.

The document said China would significantly ease its one-child policy, allowing couples to have two children if one of the parents is an only child. Currently, Chinese couples are restricted to one child except under some circumstances, such as rural dwellers, pilot programs in a number of areas and among ethnic minorities.

Enacted in 1980, the policy has been lauded by officials for taming a surging population from a years-earlier baby boom. But economists say it risks eroding China's competitive advantage, draining its labor pool of future workers as the population ages and puts a greater strain on China's emerging social safety net.

 

The policy has also come under fire for local-level abuses such as forced abortions and sterilizations—practices that are illegal in China but are sometimes used by local officials to meet their family-planning quotas.

On economic matters, Chinese leaders said they would establish a system for insuring bank deposits, prepare a mechanism for financial bankruptcy and ease controls on prices for energy, water, telecommunications and other services. They will also increase the amount of profits that China's vast state-owned enterprises pay to the government.

It also said it would ease curbs on offshore securities investments and mergers and acquisitions, without providing details.

The moves follow calls by economists for Beijing to loosen its grip on capital controls and allow private capital to have a greater role in China's economy. Economists say China's traditional reliance on government investment and exports to fuel its economic growth is unsustainable, and China's leaders have called for a greater role for China's growing consumer class in powering growth.

The document set few firm deadlines. One of them raises the proportion of profits state companies must return to the treasury, increasing that rate to 30% by 2020, from a current range of 5% to 15%.

China also plans to abolish a controversial labor camp system in what Xinhua described as "part of efforts to improve human rights and judicial practices." Under the system, which has been in place since 1957, police are allowed to imprison people in labor camps for up to four years without formal arrest or trial.

Public outrage over the system swelled earlier this year, after a woman named Tang Hui was sent to a labor camp after petitioning authorities for tougher penalties for the men convicted of abducting and raping her daughter. Ostensibly set up to as a way to keep petty crimes from clogging the courts, in practice it is used to imprison petitioners and other politically disruptive people.

Officials had signaled intentions to either reform or abolish the system, known as re-education through labor, as early as January, but this marks the first time the government has mentioned abolishing it in a formal document.

The document stressed resource conservation to combat severe environmental degradation, which has emerged in recent years as a major point of social instability. It added that further liberalization of resource pricing would play an important part in that effort.

Perhaps most notably, the document said in certain parts of China, local governments wouldn't be judged on economic performance alone, and that environmental protection would play an increasingly important role in evaluations. Environmental scholars have long said cadres in China had a disincentive to protect the environment because their promotions were tied too closely to economic growth and other factors.

The government also said it would step up health-care reform, accelerating an overhaul of its public hospital system to create more community hospitals and relieve overrun facilities in big cities.

Authorities will also change the way that doctors are paid to try to address the low wages that have contributed to bribery and corruption in hospitals. It also said catastrophic health insurance would be offered for the first time as part of the health insurance system.