I have visited many mainland friends in senior financial or business positions in Beijing after the 19th Party Congress to discuss its implications.
The once-in-five-years meeting typically sets the direction for future development. Interestingly, this time the authorities did not outline GDP targets. What does that mean?
I believe that indicates the government focus has shifted to high-quality growth rather than high-speed growth.
China will seek balance among quality, efficiency and momentum in its future economic development, and focus on tackling the issue of imbalance.
In fact, Chinese leaders vowed to double GDP in 2020 during the 18th Party Congress. Domestic economic growth has stabilized, and the nation is on track to achieve that goal as long as GDP growth hits 6.8 percent this year and keeps rising at no less than 6.3 percent in the next three years.
In terms of future direction, a number of initiatives stand out.
First, China will focus on developing advanced manufacturing, internet, big data, artificial intelligence and integrate new technologies into the real economy. The nation is keen to breed new growth engines in the medium and high-end consumption areas.
Second, the nation will encourage upgrades of traditional industries and development of modern service industries. It will improve the infrastructure network including highways, railways, shipping, pipelines, power grid, logistics etc.
Third, there will be continued efforts to develop the agricultural sector and boost village economies.
Fourth, China aims to build an innovation-driven economy, involving corporations, universities and other market participants.
Lastly, the nation will build city clusters consisting of cities of different sizes and move migrant workers to urban areas. Also, the non-capital function of Beijing will be allocated to nearby cities in order to stimulate growth in the Beijing-Tianjin-Hebei region. The authorities will set a top bar when planning the Xiongan New Area.
I believe China will give more weight to structural reform next year, and the direction and focus of reform will be concentrated on improving efficiency in resources allocation and output.
This article appeared in the Hong Kong Economic Journal on Nov. 6
Translation by Julie Zhu
[Chinese version 中文版]
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