China's Communist rulers announced an easing of the controversial one-child policy amid a raft of sweeping pledges unveiled Friday including the abolition of "re-education" labour camps and loosening economic controls.

The moves also included reductions on the application of the death penalty, reforms to a widely abused "petition" system and changes in a residency registration scheme.

They were contained in a 22,000-word document on "major issues concerning comprehensively deepening reforms" released by the official Xinhua news agency, three days after a key meeting of the Communist leadership in Beijing.

The gathering, known as the Third Plenum, has historically been the venue for major reform announcements, and comes one year after new leaders took charge of the ruling party.

Couples will be allowed to have two children if one of the parents is an only child -- widening the exceptions to a rule introduced in the late 1970s to control China's population, the world's largest.

The policy has at times been brutally enforced, with authorities relying on permits, fines and in some cases forced sterilisations and late-term abortions that have triggered public outrage.

Critics also argue that it has contributed to the gender imbalance of about six boys born for every five girls, with sex-specific abortions remaining common.

Beijing's statisticians warned this year that China's working-age population had begun to shrink for the first time in recent decades, falling by 3.45 million to 937 million in 2012.

"The birth policy will be adjusted and improved step by step to promote 'long-term balanced development of the population in China'," Xinhua said.

The law currently restricts most parents to one child, with exceptions including some rural families whose first child is a girl, ethnic minorities, and couples who are both only children.

Joan Kaufman, director of the Columbia Global Centers in Beijing and an public health expert, called the relaxation a "long overdue" move that will ease concerns about care for China's elderly population.

"There's no concern about overpopulation in China anymore. Couples are having fewer kids. They're not replacing themselves," she said, noting that the fertility rate is well below the "replacement" rate of 2.1.

China will also abolish its controversial "re-education through labour" system, under which police panels can sentence offenders to up to four years in camps without a trial, the document said.

Xinhua said the move was "part of efforts to improve human rights and judicial practices", which also included reducing the number of crimes subject to the death penalty.

The deeply unpopular labour camp system is largely used for petty offenders but also blamed for rights abuses by officials seeking to punish "petitioners" who try to complain about them to higher authorities.

Under the scheme, introduced in 1957, people can be sent for up to four years by a police panel without a court appearance.

A 2009 United Nations report estimated that such facilities held 190,000 Chinese.

Pressure to change the system has been building for years.

In a high-profile case last year, Tang Hui, a mother from Hunan province, was sentenced for petitioning repeatedly after her 11-year-old daughter was kidnapped and forced to work as a prostitute.

Maya Wang, a researcher for overseas-based campaign group Human Rights Watch, welcomed the move but cautioned that the replacement was not yet known.

Other forms of extralegal detention remained in place, she said, and "the suppression of dissent continues".

An earlier Third Plenum in 1978 introduced fundamental economic reforms that ushered in decades of breakneck growth and transformed China.

The economic changes Friday announced signalled authorities would loosen their grip on the world's second-largest economy, which experts say needs restructuring to ensure long-term growth.

The plans include requiring state firms to pay the government larger dividends and allowing private companies a bigger role in the economy, the document said.

"This will have an effect on facilitating a better competitive environment," ANZ Banking Group economist Liu Ligang said.

China will also "accelerate the reform" of its household registration or "hukou" system, which bars rural residents from equal access to benefits such as healthcare and education when they move to cities.

The move could bolster authorities' drive to increase urbanisation as a way to lift living standards.

But critics fear lifting the restrictions could cause overcrowding in major conurbations such as Beijing, and Xinhua said changes would be introduced in small cities first.

China also pledged to reform a petition system, where citizens seeking to lodge complaints against authorities often end up in unofficial "black jails".

"Authorities must respond to and terminate cases within the legal framework," Xinhua said, without elaborating.

Users of China's Twitter-like service Sina Weibo cheered the reforms -- although some sounded bittersweet.

"Thanks to the active participation of the public and media and the advocacy of legal activists. This proves the truth that rights can only be obtained through a fight," wrote one poster.

Another user said of former labour camp prisoners: "Those who paid a heavy price will be emotional tonight."