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Key Party meeting to review proposals for medium－and long-term prospects The Communist Party of China will set the tone for the country's
socioeconomic development in the next five years and beyond at this
week's key Party meeting, amid economic slowdown as a result of the
ongoing COVID-19 pandemic and growing tensions with the United States. The Fifth Plenary Session of the 19th CPC Central Committee, which
opens on Monday, will review and adopt proposals for the 14th Five-Year
Plan (2021-25) for Economic and Social Development and targets for
2035－a top-level policy blueprint for China's mid－and long-term
development. President Xi Jinping, who is also general secretary of the CPC
Central Committee, has paid a great deal of attention to the drafting
work. In the past months, he made two instructions on formulating the
blueprint, and held a series of meetings and symposiums to obtain
opinions and suggestions from economists, social experts, entrepreneurs,
scientists, professionals outside the Party and grassroots
representatives in order to make the plan more relevant to China's
reality. Using the mid－and long-term plan to guide social and economic
development is an important way for the Party to govern the country, Xi
said when addressing a symposium attended by experts in social and
economic fields in August. Practice has proved that the five-year plans can fully leverage the
decisive role of the market in allocating resources, and can also help
the government play a better role in economic development, he added. Since 1953, China has made and implemented 13 five-year plans for
economic and social development, except for a period of economic
adjustment between 1963 and 1965. Such plans lay out detailed targets
and guidelines covering economic, social, educational and environmental
matters, and provide directions for economic reforms and industrial
restructuring. Guided by them, China's overall national strength has been enhanced,
people's livelihoods have been improved, and the country has created the
miracle of long-term rapid economic growth while maintaining long-term
social stability, Xi said. The formulation of the 14th Five-Year Plan comes at a critical point
at which China's goals of completing the building of a moderately
prosperous society in all respects by 2021 and becoming a modern
socialist country by 2049 converge with challenges in the economy,
diplomacy and industrial development amid the COVID-19 pandemic. In response to the challenges on the way ahead, Xi has stressed
accelerating the building of the "dual circulation" development pattern
on many occasions in order to increase the country's economic
resilience. The new development pattern highlights the need to allow the domestic
and international markets to complement each other with the domestic
market as the mainstay. Specifically, "domestic circulation" will be the
main driver that will likely unleash the potential of domestic demand
and stabilize supply chains, while "external circulation" will continue
to improve connectivity with international markets via opening-up and
cooperation. Xi described the new development pattern as a "strategic choice" for
China to rebuild its strength in international cooperation and
competition in line with the changes in its development stage and
environment. While calling for measures to expand domestic demand, Xi also
stressed that China will further push forward higher-level opening-up to
build an open economy. Experts said that the new development pattern is expected to be
enshrined in the 14th Five-Year Plan to increase the country's economic
resilience in response to heightened geopolitical concerns and mounting
uncertainty in the global economy. Chen Fengying, a senior researcher of the world economy at the China
Institutes of Contemporary International Relations, said that the next
five years are critical for China to shape the new development pattern
in dealing with the grave and complex domestic and international
landscape. The new five-year plan needs to take into account the country's
economic upgrading and high-quality growth during the post-pandemic
period, Chen said. Manu Bhaskaran, CEO of Centennial Asia Advisors, said that the "dual
circulation" strategy is not a sign that China is turning inward. Chinese leaders understand well that engagement with the outside
world is vital, so the question the new five-year plan has to answer is
how to achieve a good balance between building resilience and
maintaining an open economy, Bhaskaran said in an opinion article
published on the Edge Markets website. Despite already being an integral part of China's development
strategy, promoting innovation-driven development to move the country up
the global value chain has become increasingly urgent in rep years. While addressing a meeting attended by Chinese scientists in
September, Xi underlined the strategic importance of scientific and
technological innovation in the country's economy, and called for
concrete efforts to solve problems that curb the development of
technological innovation. Xi's remarks came as the prospect of continued US efforts to
undermine China's industrial and technological champions, such as Huawei
and ByteDance, became a serious headwind amid the country's efforts to
upgrade its industrial capabilities and accelerate the development of
domestic high-tech industries. Resources for research In the light of decoupling pressures and technology restrictions,
China may allocate more resources to fundamental research, frontier
research and technology bottleneck areas－including chips and
semiconductors, software, precision machinery, fine chemicals and
advanced robotics－better protect intellectual property rights, and offer
more market inpives to researchers, according to Wang Tao, chief
China economist at UBS Investment Bank. Analysts said the 14th Five-Year Plan is also likely to stress the
need to rectify the imbalance between the urban and rural economies,
improve regional disparities and create several mega-clusters of cities
in order to build a stronger and more resilient Chinese economy. It is clear that China is at a critical turning point, Bhaskaran
said, and its impending changes in economic strategy will have
substantial effects on the global economy and on geopolitical
developments for some time to come.
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