China is studying new ways to measure the size of its economy to reflect ambitious reform plans that will make it easier for farmers to sell their land and to take into account property values.
China’s Communist Party leaders unveiled a broad program of reforms last week. One of their objectives was to make it easier for farmers to sell the right to use some of their land. Farmers don’t currently own their land, but they have the right to use it.
Among a number of changes outlined in a document released last Friday, China’s leaders pledged to boost income for rural residents by giving them more property rights, allowing them to mortgage their property and envisioning experiments in allowing farmers to sell their land.
Consumption measurements also will be revised to include some services paid by the government, such as for education and medical treatment, the statement said.
A final plan will be announced at the end of next year or in early 2015, according to the statement.
Boosting the income and financial resources of chinese in the rural areas will help address income inequality in China. People in the cities and coast have a lot more money. Boosting the rural areas seems to be a stimulus that would not be pushing areas that are already over developed.
Because China is the largest trading partner for many nations, financial markets are interpreting this policy document as bullish for regional and global economic growth. The world’s financial sector, in particular, has been looking for the economy of the world’s most populous nation to evolve from being export-driven to consumer-driven.
Following are some of the goals Beijing included in the statement:
* Opening up the country’s financial markets.
* Changing registration for stock market listings, which will encourage more foreign investment.
* The introduction of a bank deposit insurance program that will create confidence in the country’s financial institutions.
* Interest-rate liberalization aimed at encouraging savings and rewarding investors.
* Reducing state ownership of businesses.
* Encouraging competition among private firms.
* Reform of the country’s household registration system, which has an impact on matters ranging from employment to social benefits.
* Greater protection for the environment.
* Doing away with labor camps.
* Promoting social security programs to provide a safety net.
* A relaxation of the nation’s infamous one-child policy, to increase the number of consumers and workers.
* Commodities such as copper, coal, and iron ore should all gain from increasing consumer demand. China uses more coal, copper and iron ore than any other country. All are needed in the construction process and the operating of factories, farms, machinery and machinery. Increasing growth in China is positive for all of these commodities.