China's New Reforms : One-child policy relaxed

INTRODUCTION
The recent Third Plenum (plenary meeting) of the 18th Central Committee (CC) of the Chinese Communist Party under Xi Jinping, held in Beijing from 9 to 12 November 2013 is going to prove as a major turning point & will lead to development of “socialism with Chinese flavor”. The major meeting of the Third Plenum took place in 1978. It is after 35 years that new major policy change is going to take place in China. It is mainly market-oriented policies: interest-rate and currency liberalization, reform of banks and state enterprises, clearer land ownership for rural inhabitants, and a better deal for urban migrants.

MAJOR DECISIONS OF 1978 MEETING
⇒ Redistributed land among individuals
⇒ Started the open door policy which resulted into development of special economic zones.

NEW REFORMS
⇒ All the new reforms are scheduled to be completed by 2020.
⇒ Consolidate and develop the publicly owned economy, persist in the dominant role of the public ownership system
⇒ Establish a uniform “land use market” across town and country
⇒ Empower peasants with more property rights (peasants will be allowed to lease their land for commercial purposes)
⇒ Relax investment access
⇒ Accelerate the construction of free trade zones
⇒ Expand inland and coastal openness
⇒ Establish a “National Security Committee” on the lines of the national security councils in Russia and the United States (US), bringing together the military, the intelligence, foreign policy, and internal security establishments under one umbrella.
⇒ Local governments won’t be allowed to invest in and run businesses, which suggests a whole lot of privatization of local state owned enterprises (SOEs) is on the anvil.

REFORMS IN A NUTSHELL

Sr. No.	Reform	Description	Real Motive
1.	One-child policy relaxed	In 1979, one child policy was formulated which resulted into decreased birth rate. But now it has been relaxed. A couple can have second  child if one of the parents is the only child of his/her parents.	Done mainly to support the ageing policy
2.	Welfare System reformed	China would relax its system of household registration, known as the hukou system. Under it migrants have to give up the public services	It will facilitate free movement of labour
3.	Greater rights for farmers	Farmers can now possess, use, benefit from and transfer their contracted land	To stop the growing discontent among  farmers.
4.	Stepping up financial reforms	setting up a deposit insurance system by early 2014, giving qualified private investors the go ahead to set up banks, loosening controls on the pricing of water, electricity and natural resources and revamping the system for Initial Public Offerings (IPOs).	Insurance scheme is a way to mask their underlying mechanism of protecting China’s economy as the China's central bank removed controls on lending rates earlier this year.
5.	State-Owned Enterprises (SOEs)	SOE’s to pay larger dividends to government	For increasing revenue sources

DISAPPOINTMENT OF USA
⇒ China’s biggest SOEs i.e. China National Petroleum, Sinopec (the superlarge petrochemical group), State Grid Corporation and the state-owned commercial banks – are not going to be restructured and privatized.

CHINA’S VIEW ON NATIONAL SECURITY COMMITTEE
⇒ To counter the US administration’s “pivot to Asia” strategy that seeks to militarily and diplomatically isolate and contain the “Middle Kingdom”
⇒ To tackle the rising class struggles domestically which are the result of rising inequalities
⇒ It actually strengthens the repressive apparatus.
⇒ For consolidating security measures in China.

VIEWS ABOUT CHINA’S REFORM
⇒ It has been enacted so as to support China’s economy in the wake of economic stagnation in the developed capitalist world.
⇒ To check disparities: There are growing disparities between the workers and peasants on the one hand, and the economic and political elites on the other (This “old left” now has the indirect support of China’s “new left” – students, intellectuals and other sections of the middle class (active internet activists) in the universities and urban centres).

REASONS BEHIND THESE REFORMS
⇒ China’s economic power is driven by cheap exports based on cheap labor, infrastructure built by state enterprises with low-cost bank funding, and government budgets funded by land sales.
⇒ But labor is no longer cheap, road construction to connect major cities has given way to building large shopping malls in small towns, and land sales based on re-zoning are reaching both economic limits and the limits of villagers' tolerance.
⇒ These reforms is a rapid shift from China's export-based growth model to one based on domestic demand; from infrastructure to consumption; from the dominance of large state-owned enterprises to that of small and medium-size private enterprises; from industry to services; and, more broadly, from bureaucratic control to market control.

REASONS TO SET UP NATIONAL SECURITY COMMITTEE
⇒ According to China, National security, as defined by Chinese law, deals with collusion and connections between Chinese citizens and foreign elements that undermine the People’s Republic, including revelation of state secrets, subversion, sabotage, and any other acts that might be construed as undermining China or the leading party.
⇒ “Terrorists, extremists, and separatists” that are the concern driving the creation of a National Security Committee.
⇒ China is sitting on a social time bomb and the government is strengthening the police and other repressive apparatuses to suppress any revolt by the working class.
⇒ It is part of China’s preparations for war, in response to the Obama administration’s “pivot to Asia”—a campaign to militarily and diplomatically isolate and contain China
⇒ Chinese media has discussed the NSC as part of broader military reforms in the face of a worsening “security environment
⇒ To solve the problems it is facing or will be facing as a world’s super power.