Later, the subsequent third plenary sessions of CPC central committees stipulated guidelines in shaping the economic order, deepening reform, establishing a socialist market economy, facilitating fairness and justice and other groundbreaking policies.

Reform measures likely to be launched this year

The history of the CPC has shown that the Central Committee will make major reform maneuvers at each third plenary session with guiding principles to prevent "left deviation" in each session.

In late 2012 at the Political Bureau meeting, the new CPC leadership vowed to continue reform and opening up, in a bid to respond to public expectation. Insiders say that both the president and the premier are keen on responding to the people's demand for democracy, evident from the policies of curbing corruption and extravagance that they have introduced since taking office.

Investment bank Barclays predicted that the new leadership will only change policy slightly, and that reform will aim at easier targets, including the household registration (hukou) system, interest rate marketization, and the tax system.

They predict that China's central bank will move towards opening a capital account and interest rate marketization, and that the government will likely reevaluate China's population policies, such as the retirement age and family planning. They also predict that the Ministry of Finance will continue with tax reform, and may start to levy resource and property tax.

It is not difficult to predict what reform measures will be announced at the third plenary session, judging from various recent indications. On May 6, the State Council listed nine areas for economic reform in 2013 - the administrative structure, taxation, finance and investment, commodity prices, the people's livelihood, urban-rural coordination, agriculture, and science and technology - clearly a sign that the new government is aware of the public's growing resentment.

Therefore, China's future reforms will likely focus on the following areas:

First, reform of the income distribution, with a focus on raising incomes and narrowing the wealth gap;

Second, the land system - reforms on the current land requisition management system;

Third, reform of state-owned enterprises (SOE) - breaking up central government SOE monopolies and loosening the market entry threshold;

Fourth, tax system reform - improving the relationship between central and local finances by raising local government share in tax redistribution, and expanding taxation sources. Replacing business tax with value-added tax (VAT) is the centerpiece of taxation reform; and

Fifth, financial reform. New measures will seek to establish a modern financial system in China and develop the capital market to invite more direct investment. The internationalization of the renminbi, reforms on financial regulation, and interest rate marketization may also be addressed at the plenum.

There have been three periods of economic growth in China's 30 years of reform and opening-up - 1979-1990, 1991-2001 and 2002-2011, marking the beginning of the policy, the establishment of socialist market economy and China's entry into the WTO.

Prior to the third plenary session of 18th CPC Central Committee, there have already been numerous predictions about China's future development path. It is expected that President Xi and Premier Li will continue in the reform spirit seen in previous third plenary sessions and make resolute decisions, so as to put China's economy onto the right track.

The author is Chairman of Xinfu Education Group.

The post was translated by Chen Boyuan. Its original unabridged version was published in Chinese.

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