Cabinet sets up joint economic panel

China's cabinet on Friday approved the establishment of a joint conference mechanism to coordinate the nation's drive for economic reform, at a time when the overhaul process is encountering tides of resistance.

According to a statement on the central government website, the State Council approved the joint conference mechanism involving 35 ministries and commissions under the cabinet.

A man works at a workshop of the Dongbei Special Steel Group Co Ltd in Dalian. China will pursue reforms in macroeconomic controls, fiscal and taxation policies, and financial, investment and administrative governance, President Xi Jinping said.[Photo/China Daily]

The joint conference will be initiated by the National Development and Reform Commission, the top planning agency, joined by the People's Bank of China (the central bank), the Ministry of Finance, the Ministry of Land and Resources and other bodies.

According to the statement, the key tasks of the conference are to coordinate "key issues" in economic reform, study and examine the outlines of key reforms, organize joint inspections before drafting reform plans and discuss interdepartmental coordination.

Experts said the conference is intended to ensure the smooth advancement of key reforms and avoid wrangling among departments.

"On many key reform issues, different ministries and commissions under the State Council have their own interests and concerns. A consensus is hard to form," said Liu Fuhuan, former vice-director of the Academy of Macroeconomic Research, which is under the jurisdiction of the NDRC.

"China's path to reform has reached the point where any reform decision involves more than a single department."

Setting up a joint conference also reduces the chance of errors stemming from the NDRC making decisions alone, according to Liu.

The decision to set up the conference comes at a critical time, since the third plenary session of the 18th CPC Central Committee is scheduled for November. It's widely expected that momentous economic reforms will be announced during the meeting.

Speaking on Thursday at the St. Petersburg Group of 20 summit, President Xi Jinping said China is conducting a far-reaching study on the pursuit of "comprehensive and deep" reform.

China will pursue reforms in macroeconomic controls, fiscal and taxation policies, and financial, investment and administrative governance, Xi said. It will also give a greater role to market forces, he said.

The decision also comes as the NDRC faces increasing criticism. Leading economists have claimed that the commission focuses exclusively on "development" and ignores "reform".

Many scholars have urged the restoration of the State Council Reform Commission, which existed from 1982 to 1998. The commission is considered to have been above any specific department's interests, and it is seen as having outlined the vision of China's market-oriented economy.

Kuang Xianming, a researcher with the China Institute of Reform and Development, said the joint conference differs from the old commission, since the former is not an independent government institution. It is more of a coordination arrangement that is dedicated to a specific task, along the lines of the "leading group on healthcare reform".

Friday's statement didn't specify how frequently the economic reform conference will be held.