China urged to focus on domestic economy in next five-year plan to counter more hostile world
- As China prepares its 14th five-year plan, researchers at one state-affiliated think tank predicted a more hostile global situation
- Beijing urged to strengthen home-grown innovation and use vast domestic market to power economy post-coronavirus
China’s will face an increasingly hostile world over the next five years, meaning its policy plan should be focused on its vast domestic market, home-grown technological innovation and improving its citizens’ welfare, according to recommendations in a new paper.
While the report does not mention the coronavirus specifically, its recommendations suggest that China should become more self-reliant in response to the pandemic. This view represents one side of a lively debate among policymakers and scholars in China, ahead of the next five-year plan, which will come into place next year.
Between 2021 and 2025, the globalised economy which helped China grow into an economic power will be radically different, the report said, meaning it must adapt if it is to continue to thrive.
China is the only major economy that publishes a five-year policy plan and has been doing so since 1953, in a tradition borrowed from the Soviet Union. China’s own plans are broad strategic guidelines, rather than Moscow’s previously detailed command economy production worksheets.
China is currently in the final year of its 13th five-year plan, the stage during which the Soviet Union collapsed. The 14th plan is expected to be published in early-2021, but brainstorming about challenges and policy options is well under way among academics and state planning officials.
That debate is expected to feature prominently in the coming meetings of the “Two Sessions,” the Chinese People's Political Consultative Congress, which is due to meet in Beijing on May 21, and the National People's Congress, which will begin to meet a day later.
“Uncertainties and instabilities are clearly increasing,” read the analysis published in the academic journal Economic Perspectives this week.
Without citing coronavirus directly, the CASS researchers suggested that China should “stick to its developmental direction and concentrate on doing its own things well”.
China now has a middle income group of between 500 and 700 million people and that alone can be a source empowering China’s economic growth for the next five years, the report said.
However, China must also attempt to smooth out a major weakness, namely unbalanced growth, including the yawning wealth gap between urban and rural groups.
In terms of innovation, the researchers led by Huang Qunhui said China should rely less on foreign technologies. “China’s innovation capacity is still lagging behind developed countries. Breakthroughs in core technologies are in urgent need,” read the report.
The Made in China 2025 plan, published in 2015, stated Beijing’s ambitions to dominate future technologies such as robotics and artificial intelligence. However, after loud complaints from the US and European Union, China has been forced to play down such bold innovative goals.
