Editor’s Note: The Fifth Plenary Session of the 18th Communist Party of China (CPC) Central Committee was held in Beijing from October 26 to 29, 2015. At the session, participants deliberated on and approved the Central Committee’s proposal for formulating the 13th Five-Year Plan for National Economic and Social Development (2016-20). The National People’s Congress (NPC), China’s top legislature, is expected to pass the 13th Five-Year Plan when it meets in March 2016. The proposed plan has clarified China’s national strategies and governmental priorities, as well as provided guidelines for market entities. This plan provides a blueprint for China’s social and economic development over the next five years and offers important guidance to ensure that various levels of government are able to complete their duties, especially with regard to economic regulation, market supervision, social management and public services. This article will analyze how to interpret the 13th Five-Year Plan, and examine which sectors the plan focuses on.
The historical mission and general theme of the 13th Five-Year Plan
The Two Centenary Goals and the Four-Pronged Comprehensive Strategy
President Xi Jinping first discussed the 13th Five-Year Plan during the NPC and Chinese People’s Political Consultative Conference National Committee sessions in March 2015. Later, at the Fifth Plenary Session of the 18th CPC Central Committee, Xi, in his capacity as general secretary of the CPC Central Committee, presented an explanation of the draft proposal of the 13th Five-Year Plan. Ensuring that by 2020, just before the CPC’s centenary in 2021, China will have built a moderately prosperous society in all respects represents the first of the Two Centenary Goals established by the CPC. This is also the first grand goal of the Chinese dream.
The 13th Five-Year Plan was designed with this goal in mind. The time period covered by this plan is the last years to accomplish the goal of building a moderately prosperous society before 2020. Additionally, in this period, decisive progress should be made in implementing the Four-Pronged Comprehensive Strategy–establishing a moderately prosperous society, deepening reform, advancing the rule of law, and strengthening Party self-discipline.
The 13th Five-Year Plan is the first five-year plan since the new leadership took power. The second Centenary Goal is dependent on the success of the first. If China can continue to maintain stable and healthy development over the next five years, the next goal is to turn China into a prosperous, democratic, culturally advanced and harmonious modern socialist country by the time the People’s Republic celebrates its centenary in 2049.
Guiding ideology and principles for the 13th five-year period
The proposed plan features an objective analysis of the environment that China will face during the 13th five-year period. Overall, this period will continue to offer a number of important strategic opportunities, but there will also be severe challenges and risks.
Based on this analysis, the plan puts forward the following guiding ideology for China’s development during the 13th five-year period:
— Following the Party’s ideological and theoretical guidance
— Focusing on improving the quality and efficiency of growth
— Accelerating the establishment of governance structures and economic growth models to spearhead the new normal;
— Ensuring the creation of a moderately prosperous society in all respects by 2020
— Forming a solid foundation for the realization of second Centenary Goal and the Chinese dream of national renewal
It was also stressed that the following principles must be upheld in order to realize the goal of building a moderately prosperous society in all respects and maintain healthy economic and social development:
— The principal role of the people
— The Scientific Outlook on Development
— Continued reforms
— The rule of law
— Coordinated planning in international and domestic affairs
— The leadership of the CPC
The primary goals of social and economic development during the 13th five-year period
The main objectives for social and economic development over the next five years were set out in the proposed 13th Five-Year Plan.
Keeping medium-to-high economic growth. At the Fifth Plenary Session, Xi stated that the average annual GDP growth rate during the 13th five-year period will be above 6.5 percent. Economic growth needs to maintain a certain speed in order to ensure that GDP and the per-capita income of both rural and urban residents double by 2020 compared to 2010. On the one hand, in order to double 2010 GDP, the annual growth rate has to be no less than 6.5 percent over the next five years. On the other hand, the per-capita disposable income of urban residents was 19,109 yuan ($2,904) and the per-capita net income of rural residents was 5,919 yuan ($900) in 2010. As the rise of residents’ income should be in sync with economic growth, the average annual economic growth rate has to reach a minimum of 6.5 percent during the 13th five-year period if the per-capita income is to double by 2020.
Maintaining an annual growth rate of 6.5 percent will help improve people’s livelihoods and allow them to enjoy the results of building a moderately prosperous society. As the Chinese economy enters the new normal, unwinding overcapacity, restructuring the economy and driving growth with innovation will all take some time to be achieved. Additionally, as the economy faces downward pressure, it will not be easy to ensure medium-to-high growth. Nevertheless, this goal has been created after opinions from various sectors of society were consulted so that positive expectations can be set, while still leaving room for adjustments. It is reasonable and in conformity with the country’s actual conditions.
Promoting innovation-driven growth. Under the conditions of the new normal, the Chinese economy is in need of innovation more than any time before. As international economic competition becomes increasingly fierce and China’s economic growth shifts gears, innovation in areas such as science, technology, industry, enterprises, the market, products, business models and management will provide new driving forces for the Chinese economy. China should hasten the formation of a development model anchored by innovation and a system that promotes innovation. As China takes the lead in development by boosting innovation and making the most of first-mover advantages, the Chinese economy will find a new engine of growth. To be more specific, emerging industries including energy conservation, environmental protection, bio-technology, information technology, intelligent manufacturing, high-end equipment and sustainable energy will embrace new development opportunities. Also, the government will encourage mass entrepreneurship by offering and promoting extensive support for existing and new business models such as crowd-sourcing and crowd-funding.
Accelerating agricultural modernization. China is a large agricultural country. Agriculture is the key component that will allow China to ensure continued modernization and the building of a moderately prosperous society. During the 13th five-year period, China will expedite the establishment of a new system of agricultural management, encourage the development of a cooperative economy in rural areas, and support large-scale, professional and modern management. The country will also encourage and guide industrial and commercial capital to flow to rural areas to develop modern planting and breeding businesses, thus introducing modern production and management models to rural areas. Standardization and information technology will be promoted in the agricultural sector. Systems to ensure agricultural product quality control from farm to table, promote the popularization of modern technological innovation in agriculture and provide commercialized agricultural services will all be improved.
Advancing the reform of institutional mechanisms. China will pursue deeper reforms across the board during the 13th five-year period. Accelerated reforms in areas such as pricing, the fiscal system, taxation, finance, state-owned enterprises, income distribution and social management will enable the country to embark on a path to sound and sustainable economic and social progress. These institutional reforms will resolve drawbacks and problems resulting from runaway growth in the past and inject impetus to China’s development.
Promoting balanced development. Problems such as regional disparities, the urban-rural divide and cultural progress lagging behind economic growth are evident in China. To address these problems, the 13th Five-Year Plan will focus on making China’s development more balanced. China must uphold regional and urban-rural integration, attach equal importance to economic growth and cultural progress, and coordinate the development of national defense with that of the economy. It will create room for development by promoting balance and foster sustainable development by strengthening weak sectors.
Improving the ecosystem. Promoting ecological progress and building a beautiful China will be written into China’s five-year plan for the first time. During the 13th five-year period, sustainable development will receive much more urgency than before. The need to bring about enduring economic and social development, raise people’s living standards, improve social welfare and preserve ecological assets will continue to be stressed. In this context, it is highly relevant to promote the green revolution and achieve a green economy. The 13th Five-Year Plan will chart a course for ecological progress in a wide range of areas such as industry, agriculture, energy and resource use, technological upgrades, environmental governance and lifestyles.
Enhancing openness. Over the last more than 30 years, reform and opening up have helped integrate China into the global economy. Promoting reform and development through opening up has been a successful practice. During the 13th five-year period, China will continue with its policy of opening up. Specifically, it will implement a more proactive opening-up strategy by pursuing deeper reforms and embracing greater openness–two mutually reinforcing goals. The 13th Five-Year Plan will call for reciprocal openness with the financial industry, the Belt and Road Initiative, free trade agreements, the Asian Infrastructure Investment Bank, the BRICS New Development Bank, etc. China will be more active in taking part in global economic governance and assuming international responsibilities and obligations.
Improving social security. The hallmark of the drive to build a moderately prosperous society in all respects is that everyone participates in, contributes to and benefits from it while enjoying equal opportunities and appropriate levels of social security. The 13th Five-Year Plan aims to achieve moderate prosperity for all with a holistic approach that covers areas such as education, employment, a social safety net, basic medical care and public health, public cultural services, the population policy, income distribution and targeted poverty alleviation.
These goals share two defining characteristics: First, they conform to China’s national conditions. The proposed plan has made an in-depth analysis of China’s internal and external environments. While fully recognizing continuity from the 12th Five-Year Plan (2011-15) period, it gives greater substance to China’s development goals in a contemporary context. The medium-to-high growth target should ensure that the goals of doubling GDP and the income of urban and rural residents are obtained. This target must also be based on greater balance, inclusiveness and sustainability, while underlining the need to emphasize the quality and efficiency of economic growth against the backdrop of the new normal. Second, these goals can resonate with the public. They involve the public’s top concerns, which the government needs to address at various levels. This will lead to concrete changes that will be beneficial to the public.
Keywords in the proposed plan
Five words that set the tone for China’s development: innovation-driven, balanced, green, open and inclusive
The proposed 13th Five-Year Plan puts forward a philosophy that calls for innovation-driven, balanced, green, open and inclusive development. This philosophy is based on a review of China’s experiences in building socialism. It adds a new dimension to the Chinese socialist development theory and will guide the formulation of the official 13th Five-Year Plan and China’s development in that period.
Three traits essential to China’s future: beautiful, healthy and safe
The proposed plan vows to make China a beautiful, healthy and safe country, a pledge that has garnered attention and anticipation.
To build a beautiful China, priority should be given to strengthening environmental governance. The proposed goals and tasks on building a healthy China illustrate the importance the ruling CPC attaches to people’s health. A well-established healthcare system is a crucial part in ensuring that the goal of building a moderately prosperous society is met. To build a safe China, putting people first, public participation and shared benefits are all of fundamental importance. Only by upholding the people’s principal role and encouraging them to take the initiative can China move full steam ahead on the safety program.
The proposed 13th Five-Year Plan features a number of new concepts, notions and measures, which shed light on trends in China’s economic and social development in the coming five years.
Three major strategies: These include a cyber power and national big data strategy, an innovation-driven development strategy, and a strategy to boost food supply by increasing farmland productivity with science and technology.
Five major projects: These include a major public facility and infrastructure project, an urban underground pipeline network renovation project, international Big Science plans and projects, an industrial foundation consolidation project, and a smart manufacturing project.
Four focuses of balanced development: These include regional coordination, urban-rural coordination, a balance between economic growth and cultural progress, and the integration of the development of the economy with that of national defense.
Five initiatives on green development: These initiatives focus on setting up uniform and well-regulated national pilot zones for ecological progress, issuing a national zoning blueprint and a catalog of main farming areas as well as key eco-friendly functional zones, promoting an energy revolution, implementing the national energy conservation action plan, and ensuring all industrial pollutant emissions are up to the standard.
A roadmap for targeted poverty alleviation: This roadmap focuses on relocating residents from areas where they are unable to make a decent living owing to insufficient resources, providing a safety net to those who have lost their ability to work, and exploring a property income-supported poverty alleviation system.