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China's Leaders to Discuss Economic Reforms Next Week - 2003-09-30


Leaders of China's communist party are due to hold their annual meeting next week. Analysts say at the top of the agenda will be plans to tackle the growing gap between rich and poor in the communist nation.

The three-day meeting starting on October 11 will bring together China's leaders, including President Hu Jintao, the head of the Communist Party.

Analysts say President Hu and others are expected to start the process of enacting sweeping economic reforms. The changes will be aimed at shrinking income disparities, which are dogging the country as its economy continues to skyrocket.

Chinese state media say Communist leaders will revise their constitution and make decisions to improve the economic system. These reforms are expected to include measures to protect the growing number of entrepreneurs who are fast becoming the backbone of the Chinese economy.

Political Science professor Joseph Cheng at the City University of Hong Kong says the new focus on protecting the rights of entrepreneurs is another step in the Chinese communists' departure from the traditional socialist model.

"Chinese leaders now believe that the private sector is a very important growth point, and [that] the private sector not only will provide further momentum for economic growth, but it is also looked upon as an important engine that generates job opportunities," said Professor Cheng. "Most of the small and medium enterprises, most of the labor intensive enterprises are in the private sector."

Communist leaders are expected to address issues including the opening up of credit to private companies. Currently, private entrepreneurs cannot borrow from banks, which are state owned. Businesses often have to resort to illegally borrowing from underground banks.

Another inequity that entrepreneurs complain about has to do with rules that in some cases require them to enter into joint ventures with state companies. Private business people say they are often left out the decision-making process, and are sometimes shortchanged on the profits.

The meeting next week will also focus on a much publicized campaign to revitalize areas of northeast China. The region is often referred to as China's Rust Belt because of the large number of people who have been left unemployed following the shutdown of unprofitable state-owned factories.

Campaigns have also focused on the deeply impoverished West, where some people are getting by on $70 a year.

Since taking office in March, President Hu Jintao has pledged to battle the growing disparity between those who are benefiting from China's economic explosion and the more than 100 million Chinese who live in abject poverty.

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