China’s Singapore Swing

The Chinese Communist Party has released the final document of the Third Plenum of the 18th Central Committee. The document is as notable for what it leaves out – political and governance reforms – as it is for the decisive move to a free-market economy that it announces.

BEIJING – The Chinese Communist Party has released the final document of the Third Plenum of the 18th Central Committee. In the CCP’s history, the third plenum has traditionally been the occasion for the party to announce its major policies for the next 5-10 years. This year happened to be one of leadership transition, so the third plenum became more important. As expected, its final document unveils a plan for comprehensive reforms that will reshape China’s economy and society in the next decade.

For starters, the household registration (hukou) system will be reformed. Small cities and towns will allow migrants to apply for the local hukou with no strings attached, and medium-size cities will do the same, with some restrictions. Although large cities will remain as closed as ever, the new policy will dramatically weaken the institutional foundation of China’s long history of urban-rural and regional divides.

Similarly, the one-child policy that has been enforced for the last 34 years will be modified. In most provinces, parents who are both single children themselves already can have two children. The new policy recommends that provinces allow couples to have two children if either parent is a single child. While this will affect only around 10 million couples – a small number in a country of more than 1.3 billion people – the reform represents a gigantic step toward ending the one-child rule.

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