Date
19 January 2017
Farmers harvest wheat in Helianwan village in Gansu province. Unbalanced, uncoordinated and unsustainable development remains a big problem in China. Photo: Xinhua
Farmers harvest wheat in Helianwan village in Gansu province. Unbalanced, uncoordinated and unsustainable development remains a big problem in China. Photo: Xinhua

Here’s a glimpse of China’s next development blueprint

Beijing will hold the fifth plenary session of the 18th CPC Central Committee in October.

The meeting will draft a blueprint for the next five years and outline the key opportunities for investors in the 13th five-year period.

The politburo of the central committee has spelled out the goal of building a moderately prosperous society in all respects by 2020.

Beijing will also affirm the first of two “century goals”.

The 13th Five-Year Plan is a crucial stage in the effort to bring about a moderately prosperous society.

China adopted 24 main development metrics during the 12th Five-Year Plan and achieved most of these targets as expected.

However, there is still a long way to go before it completes building a moderately prosperous society in all respects.

In particular, rural development continues to lag targets and more than 70 million people are still struggling under the poverty line.

It’s not easy to haul millions of people out of poverty and achieve synchronized growth in rural areas.

The 18th party congress report states that China remains in an important period of strategic opportunities for its development.

However, the global environment has witnessed a sea change and China is facing various challenges.

Beijing will encounter more severe challenges during the 13th five-year period.

As a major developing nation with the world’s largest population, China needs to tackle its own issues in the first place.

That’s the biggest contribution it can make to the world and only then can it assume more responsibilities.

China’s gross domestic product topped US$10 trillion in 2014, during which the global economy extended a recession to a seventh straight year.

Last year, the eurozone contributed US$200 billion to the global economy and the US contributed US$375 billion.

By contrast, China added US$1.32 trillion to the global economy in the same period.

In late 2014, President Xi Jinping outlined the “Four Comprehensives” strategic blueprint for the nation’s future strategic development.

That means China will strive to comprehensively build a moderately prosperous society, comprehensively deepen reform, comprehensively implement rule of law and comprehensively strengthen party discipline during the 13th five-year period.

Meanwhile, the nation will fully implement the overall plan for promoting economic, political, cultural, social and ecological progress, as well as strengthen party building.

Unbalanced, uncoordinated and unsustainable development remains a big problem in China.

The development gap between urban and rural areas and between regions remains wide, so are income disparities.

There are many problems affecting people’s immediate interests in education, employment, social security, healthcare, housing, the ecological environment, food and drug safety, workplace safety, public security, law enforcement, administration of justice, etc.

The government needs to combine the “Four Comprehensives” strategy with the 13th Five-Year Plan.

Green development will also become one of its key areas.

China experienced marked change in the latter part of the 12th five-year period, grappling with an economic slowdown and host of longstanding issues over resources and environment.

In this case, China has to drop the high-growth model driven by highly polluting and energy-intensive industries.

Green development is a solution to the current economic difficulties which can’t be resolved by massive investment and big projects.

The country has to adopt a green development strategy and create new sources of growth.

For example, traditional fossil fuel still accounts for up to 90 percent of China’s energy demand.

New energy account for a low ratio due to high development costs.

Also, traditional fossil fuel has monopolized the market and restricted growth of new energy.

Under the new plan, non-fossil fuel will account for 15 percent of primary energy consumption by 2020.

This includes hydro power, nuclear power, wind power, solar, bio-energy and other renewable energy.

To achieve this, the government has to raise the price of fossil fuel and impose a punitive cost for damage to the environment.

Meanwhile, it should lend more support for environmental protection industries.

The government should include ecological and resources benefits in the evaluation of ministries and local governments on their green initiatives.

Education, employment, social security, healthcare, housing, ecological environment, food and drug safety and other livelihood issues are the key focus during the 13th five-year period.

This article appeared in the Hong Kong Economic Journal on Sept. 14.

Translation by Julie Zhu

[Chinese version中文版]

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JZ/JP/RA

Senior investment banker

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