China announces major economic and social reforms

BEIJING (Reuters) - China released a raft of detailed reform plans on Friday, promising sweeping changes to the economy and the country's social fabric as it seeks to unleash new sources of growth after three decades of breakneck expansion show signs of faltering. A reform document released by the Communist Party following a four-day conclave of its top leaders said China would accelerate capital account convertibility, scrap residency restrictions in small cities and townships, integrate urban and rural social security systems and push forward with an environmental tax, among many other measures. China will also ease its family planning policies and abolish a controversial labour camp system, according to the document, the official Xinhua news agency said on Friday. The document was approved by the leaders' meeting. In an initial communique they had promised "decisive" results by 2020. "Whilst further assessment and detail is needed, the policy moves on the surface appear to be a sizeable step in the right direction," said Keith Bowman, equity analysts at Hargreaves Lansdown. "Any actions which aid the domestic Chinese economy and therefore help re-balance the global economy should be welcomed with open arms." The statement was in line with a leaked document that circulated widely on social media earlier, helping fuel the stock market's strongest rally in two months. China's economy has grown at a double digit rate for three decades but the government expects the rate of expansion to slip to 7.5 percent this year, the weakest pace in 23 years. The reforms are part of government plans to shift the main growth drivers away from investment and exports to services and consumption, more in line with developed economies. To achieve that, Beijing wants to encourage millions of rural Chinese to move to live in urban areas, but that requires major land and residency reform that currently are seen as impediments to the plan. (Beijing newsroom; Editing by Neil Fullick)