China pledges bigger role for free market

China’s ruling party has pledged to let markets play a “decisive” role in allocating resources, as it unveiled a reform agenda for the next decade, looking to overhaul the world’s second-largest economy to drive future growth.

The official Xinhua news agency announced on Tuesday the close of the four-day meeting, known as the Third Plenum, which has traditionally set the economic tone for a new government.

In the meeting, which brought together all 376 members of the ruling party’s Central Committee and took place amid intense security and secrecy, a decision on “major issues concerning comprehensively deepening reforms” was approved, Xinhua said.

Citing a communique, Xinhua said that the market will play a “decisive” role in the allocation of resources, though it did not elaborate. In previous policy statements, the Communist Party had often described markets as playing a “basic” role in allocating resources, Xinhua said, meaning the new language amounts to an upgrading of its role.

China has in the past used the meetings to signal major changes in policy, most notably at a Third Plenum in 1978, when it embarked on the landmark drive that has seen it transformed over the past three decades from a Communist-style command economy into a key driver of global growth, trade and investment.

Over the course of the meeting Chinese state media repeatedly raised the prospect of major reforms. In a frontpage editorial, party mouthpiece the People’s Daily praised past economic reforms for bringing prosperity to the world’s most populous country and called for more.

The meeting comes after China’s economy racked up its worst growth rate in 13 years in 2012, expanding at an annual rate of 7.7 percent.

President Xi Jinping and Premier Li Keqiang must unleash new growth drivers as the economy, after three decades of breakneck expansion, begins to sputter, burdened by industrial overcapacity, piles of debt and eroding competitiveness.