China eases restrictions on private businesses

Foreign investment also encouraged to boost economy

BEIJING China’s leaders pledged Friday to open statedominated industries wider to private competition and ease foreign investment limits in a sweeping plan aimed at rejuvenating a slowing economy.

The changes promised in a report could be China’s biggest economic overhaul in two decades. State media have compared the effort to market-style reforms in 1978 that launched China’s economic boom.

Chinese leaders are under pressure to replace a growth model based on exports and investment that delivered three decades of rapid growth but has run out of steam. Reform advocates say Beijing must curb the privileges and dominant role of state companies they say are inefficient and a drag on growth.

The ruling party pledged to ease barriers to private competitors in markets controlled by state companies, though they reaffirmed governmentowned industry is the core of the economy.

“We must promote orderly opening to the outside,” the report said.

It left out many details of what role private or foreign competitors might be allowed in government-controlled industries such as energy, telecoms and finance. But it outlined changes clearly intended to make industries more efficient and productive.

It promised measures such as allowing the creation of privately owned banks and use of market forces to allocate resources. Both would help dynamic private companies that create most of China’s jobs and wealth but struggle to get financing.

The report pledges to ease limits on foreign investment in e-commerce and other industries.

In a move possibly aimed at responding to the rapid aging of China’s population, the report said the ruling party also will ease the country’s “one child” birth policy. The party will allow couples in which one partner is an only child to have two children.