New Year resolutions on economy (3)

"Officials appear confident enough about the current state of the economy to be focusing attention on the need for economic reform," says Mark Williams, chief economist of Capital Economics, a London-based research agency.

Huang Yiping, an economist with Barclays, adds: "We think the new leadership is fully aware of the tough challenges it faces in the coming years, so simply maintaining the status quo is not an option.

"But even if the government takes decisive action, it will take time to draw up the necessary plans and build consensus among key stakeholders. Any systemic reforms are more likely to be proposed at the third plenary session of the CPC Central Committee in autumn 2013."

It is encouraging to see that the work conference has called for greater political courage and wisdom to promote the reform on China's economy, says Duncan Freeman, research fellow at the Brussels Institute of Contemporary China Studies. The key economic challenges that China faces are in the financial system, the role of state-owned enterprises, tax and the social security system, and these will require major political efforts from the government to push through, he says.

Urbanization is highlighted in the government agenda, and is seen as a new engine for economic growth. This is a sector that many European businesses could benefit from, say government officials and experts.

"Urbanization is the biggest potential for expanding domestic consumption," the statement says. Ecological principles should be integrated to make the process "intensive, intelligent, green and low carbon".

Janez Potocnik, European commissioner for the environment, says the emphasis on environmental protection will bring tremendous economic opportunities for European businesses.