Analysts: Beijing sets sights on a new China

SOME REFORMS MAY LAG

But some changes will require much more preparation and may not show any signs of happening for months or years, analysts say. Reform to allow farmers to sell their land more freely is still being tested in parts of the country, so the government appears a long way off from deciding exactly how the new idea will work in practice.

Policymakers also want to make sure that urban areas can absorb the hundreds of millions of rural migrants they want to move to cities to help promote a consumer-led economy.

That means social welfare systems, from healthcare to education, have to be strong enough to cope with the influx of people and importantly that jobs are available in the cities.

Policymakers worry a sudden rise of landless and jobless migrants could upset the national stability.

"The pre-condition for reforms is that economic growth will be steady and social stability will be maintained," said Xu Gao, chief economist at Everbright Securities in Beijing.

A relaxation of the household registration system, or hukou, which currently means that migrants leave behind the public services they are entitled to as resident of their home villages, will only gradually be expanded from smaller cities to bigger ones, analysts say. A more universal system is seen as critical if Beijing is to encourage more migration to urban areas.

But Beijing is attempting to overturn a social system in place since 1958, so change will take probably some years, they say.

Reforming State-owned companies will also take years, analysts say. The Communist Party signalled it was in no rush to break up the monopolies that dominate many sectors of the Chinese economy.

Instead, it appears to be targeting a slow squeeze on these companies, which analysts say probably reflects a more practical approach given the political power of the big state firms and the ministries that back them.

The Communist Party has raised the amount of profit the State-owned enterprises have to set aside for dividend payouts, will allow private firms to enter some protected business sectors and will allow markets to play a greater role in pricing assets, suggesting these bloated companies will have to become more efficient over time to cope with market forces.

The government has previously tried to open up sectors currently monopolized by state firms - such as oil and gas, banking, telecommunications, electricity, and transportation - to private investors, but with little success.

The reforms pledge to quicken the process of making the yuan fully convertible, but some government economists caution against high expectation amid fears among some policymakers that allowing the currency to move freely too quickly could expose the economy to volatile capital flows, such as the ones blamed on the US Federal Reserve's economic stimulus programme.

The central bank has pledged to make the yuan "basically convertible" by 2015 but it has never given a clear definition of what that means.

Still, Beijing can not be too cautious, said Zhu Baoliang, chief economist at State Information Centre, a top government think-tank in Beijing.

"They may have to quicken reforms in all fronts, otherwise they may not achieve the tasks by 2020," Zhu said.