February 24, 2018 / 9:15 AM / in 4 months

China's Communist Party to meet on reform ahead of government reshuffle

BEIJING (Reuters) - China’s ruling Communist Party will hold a three-day meeting of its top officials starting on Monday to discuss deepening of reform, and will also likely decide on key personnel decisions ahead of a government reshuffle next month.

In a statement on Saturday following a meeting chaired by President Xi Jinping, who is also head of the party, the official Xinhua news agency said the party’s Central Committee would hold a plenary session from Feb. 26 to Feb. 28.

The Central Committee is the largest of the party’s elite decision-making bodies, and is made up of 204 full members and about 170 alternate members.

The meeting overseen by Xi discussed proposals about deepening of reform for government bodies, which will be put to the plenum for formal approval. It did not give details of what those reforms would entail.

The statement said China needs to “further supply-side structural reform” and “deepen reform in keep areas”, and “boost consumption and effective investment”. It also said the government “needs to maintain the continuity and sustainability of its economic policy.”

China will also continue to adopt a proactive fiscal policy and a prudent monetary policy to fulfill its 2018 economic and social development goals, Xinhua added.

China’s economy grew 6.9 percent in 2017, the first annual acceleration in economic growth since 2010.

This will be the third plenary session of the party since a party congress ended in October with a slew of new senior party posts announced.

The overseas edition of the party’s People’s Daily said on its WeChat account that since 1978, third plenums have traditionally been about deepening reform, and everyone should “pay close attention” to what message on reform this plenum puts out.

This year marks 40 years since China began landmark economic reforms following the chaos of the Cultural Revolution.

While important party posts were unveiled at the party congress in October, government positions still need to be finally decided and formally voted on at the annual session of the largely rubber-stamp parliament which opens on March 5.

Posts that parliament will need to give its official approval for include cabinet positions such as for premier and ministers and also the chiefs of regulators like the central bank.

Liu He, a Harvard-trained economist who is a trusted confidant of Xi’s, has emerged as the front-runner to be the next governor of the central bank, the People’s Bank of China, according to three sources with knowledge of the situation.

While the party makes such decisions, they need to be voted on by parliament, though as parliament is stacked with loyal party members they will not vote against party decisions.

Parliament will also vote to amend the constitution to make reference to Xi’s political thought and to set up a constitutional framework for a new anti-corruption body.

Plenums typically do not happen so close to the opening of parliament’s annual session nor so close together, though Xi has repeatedly shown a willingness to break with precedents since he took office more than five years ago.

The last plenum was just over a month ago, which discussed the constitutional amendments.

Reporting by Ben Blanchard and Pei Li; Editing by Jacqueline Wong

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