China will deepen economic reforms as growth slows

FILE PHOTO: A man wearing a mask walks past the headquarters of the People's Bank of China, the central bank, in Beijing, China, as the country is hit by an outbreak of the new coronavirus, February 3, 2020. REUTERS/Jason Lee/File Photo

BEIJING (Reuters) - China will open up more sectors to private firms and reduce direct government interference in microeconomic activities, the official Xinhua News Agency said on Monday, as Beijing seeks to accelerate economic reforms as growth slows.

China will create a new regulation and control mechanism that prioritises fiscal, monetary and employment policies, pushes forward market-based interest rate reform and increases two-way fluctuations of the yuan currency, said Xinhua, citing a wide-ranging document detailing Beijing’s guidelines on boosting the country’s socialist market economy.

China’s economy shrank 6.8% in the first quarter of 2020 from a year earlier, as the novel coronavirus spread from the central city of Wuhan where it emerged late last year, and the government has said economic conditions remain challenging.

The country’s leaders promised sweeping reforms at a key party meeting in late 2013 but implementation has been slow, frustrating some foreign companies while some local private firms have complained about being treated unfairly compared with state-owned firms.

Beijing will also draw up a new round of medium- and long-term national plans for scientific development, according to the document, which added that state capitals would be encouraged to invest in areas critical to the country’s economy, science and technology, defence and security sectors.

China will also liberalise domestic natural gas pricing at an appropriate time and advance earlier pledges that promise equal access to oil and gas infrastructure. It currently regulates wholesale gas prices by setting city-gate prices.

The country is in the middle of launching a planned national oil and gas pipeline group which was announced in December, 2019.

The document also said legislation of a property tax would be pushed forward steadily.

Reporting by Stella Qiu, Yew Lun Tian, Min Zhang and Kevin Yao; Editing by Catherine Evans, Kirsten Donovan