China must prioritise innovation to avoid being ‘strangled’ by US in next five years, top researcher says

China Academy of Social Sciences (CASS) researcher Zhang Xiaojing says China ‘needs to rely more on itself’ to create growth drivers and combat decoupling

Current trade and technology disputes are the US ‘kicking away the ladder’ which China used to become the world’s second largest economy

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Zhang Xiaojing is the deputy head of the Chinese Academy of Social Sciences’ (CASS) Institute of Economics, who is also a new member of the Chinese Economists 50 Forum, a group of reform-minded Chinese economists and officials. Photo: Weibo

Published: 8:00pm, 12 Jun 2020Updated: 10:58pm, 12 Jun 2020

China should prioritise innovation and building a higher level economy in its next five-year plan to create new drivers of growth, lift the nation’s core competitiveness, and, more importantly, avoid being “strangled by Washington”, a top Chinese government economist has recommended.

Zhang Xiaojing, deputy head of the Chinese Academy of Social Sciences’ (CASS) Institute of Economics, said Beijing needs to focus inwardly given the country’s more challenging development environment – from the hostile attitude from across the Pacific, the global recession caused by the coronavirus pandemic to the major domestic economic risks.

“Innovation is the key ingredient in lifting a nation’s core competitiveness. It will facilitate the change of growth drivers in the new normal period, and also help to counter technological decoupling,” said Zhang.

Current US-China trade and technology disputes, key parameters for longer term planning and policymaking, are Washington “kicking away the ladder” which China used to become the world’s second largest economy, according to Zhang.

As the innovation in the 14th five-year plan period will be challenged by such US efforts, China needs to rely more on itself

Zhang Xiaojing

“As the innovation in the 14th five-year plan period [between 2021 and 2025] will be challenged by such US efforts, China needs to rely more on itself,” wrote Zhang, who is a leading expert on macroeconomic leverage, a key risk parameter tracked by policymakers, in a 18,000-word article published in the latest issue of state-sponsored Economic Perspective magazine.