China is set to play down the nation’s headline growth rate to highlight “growth quality” and “security” in its development plan for 2021-25 and beyond, as Beijing tries to strengthen domestic weak links in preparation for a protracted rivalry with the United States, according to China’s government advisers.
President Xi Jinping chaired a gathering of the Politburo – the centre of power within the Communist Party – on Monday, and the body endorsed the country’s five-year plan for 2021-25 as well as a grand plan that will serve as a guideline for China’s economic and social development through 2035. Both plans will be presented for approval at a major party meeting from October 26-29, according to state news agency Xinhua.
Monday’s Politburo meeting also discussed an important Communist Party document – on how the party’s Central Committee should operate – to further emphasise Xi’s role at the head of the party.
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As the final version of the five-year plan is expected to be published only after it is approved at the late-October meeting, Beijing has been busy building up a consensus on its new domestically focused dual-circulation strategy. Xi himself has chaired different symposia with government economists, scientists and “delegates” from various sectors to hear views “from both inside and outside the party”.
Justin Lin Yifu, a professor at Peking University who attended Xi’s symposium last month, said at a government-organised press conference in Beijing on Tuesday that the dual-circulation strategy is about achieving “high-quality” development.
Lin, the Taiwan-born economist who served as the World Bank’s chief economist, has a track record of predicting China’s potential economic growth rate. In August, he said China would surpass the US as the world’s largest economy by 2030. He did not provide any numbers at the press conference on Tuesday but said China will rely more on its domestic economy while seeking international cooperation.
Yao Jingyuan, a research fellow with the counsellors’ office of the State Council, said at the same event that the headline growth rate, which has been the single most important policy target for the Chinese government in recent decades, will have a less prominent role starting with the new five-year plan.
“China had to maintain a medium to high economic growth rate during the 13th five-year plan when speed was still very important,” said Yao, who previously worked for the National Bureau of Statistics. “But for the 14th five-year plan, the goal is high-quality growth, and this is a very important turning point.”
Xi, who became president in 2013, has been highlighting “green, sustainable and inclusive” development. In addition to his anti-graft campaign, Xi has also declared war on air pollution and poverty. At the United Nations General Assembly meeting last week, Xi promised that China would strive to achieve carbon neutrality by 2060 – a lofty political goal that would require significant changes in the Chinese economy to achieve.
Lin said these main policy concepts were expected to continue in the coming years.
At the same time, the biggest challenge for China’s development in the next five years will come from “external factors beyond our control”, such as “protectionism and unilateralism” adopted by other governments and “political instability” stemming from rising populism abroad, Lin said.
Lin said China’s new economic strategy was not a short-term measure to cope with the Covid-19 pandemic nor tensions with the US. However, the worsening China-US relationship is too significant for China to ignore in the drafting of its strategies. Beijing’s drive to develop a home-grown chip industry, at the risk of overinvestment and wasting resources, is in direct response to growing US restrictions of technology exports to Chinese companies.
Yuan Nansheng, the former party secretary of China Foreign Affairs University, China’s top diplomat-training school, wrote in an article published this month that China should seek to “stabilise” its relationship with the US and avoid any confrontational, or “wolf warrior”, approach in dealing with Washington.
For China’s internal development, it is expected to highlight equality over efficiency. Qiu Baoxing, counsellor of the State Council, said the central government prioritises “social benefits” over investment returns in making spending decisions.
“As far as the government is concerned, it is about being fair,” Qiu said.
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