It was a positive start to the week for Chinese markets on the back of Beijing’s reform programme which includes the easing of the country’s one child policy, efforts to boost consumption and giving a larger role to market forces.
Key onshore China stock indexes rose the most in more than two months and Chinese shares listed in Hong Kong posted their biggest gain in nearly two years.
“I think what we are seeing is that the private sector has already made considerable grounds over the last 10 years even in the absence of reforms. So I think with more central direction now, it will take China’s economy to a new level of efficiency. We need to see emphasis on soft reforms like contract rights, like property rights,” opined Geoff Lewis Global market strategist, JP Morgan Asset Management.
Growing China’s urban population and helping millions move to cities is a key plank in the plans. The strategy is seen as an essential part of a transition to economic growth that is more balanced, less investment-intensive and more consumption-driven.
Economists point out that many of the reforms will take years to implement not least because of the need for stability which has been key in all Beijing administrations
It’s been suggested these reforms are the most significant since Deng Xiaoping’s in the late 1970s and early 80s which opened the country to the outside world and set it on course to become the world’s factory floor.