China flags import diversification, greater scrutiny of foreign investment in latest five-year commerce plan
- China’s commerce ministry has released its latest five-year plan, setting priorities for the period between 2021-25
- Unlike previous years, it focuses on controlling risks associated with imports amid increasing ‘trade frictions’
China will further diversify agricultural and energy imports, boost trade with Russia and step up scrutiny of foreign investment over the next five years, the commerce ministry said in a new five-year plan.
The complex international environment has brought new challenges for economic development and uncertainty has increased significantly, the commerce ministry said in the plan published on Thursday.
The opportunities and challenges facing commerce development in the 14th five-year period are unprecedented
“The opportunities and challenges facing commerce development in the 14th five-year period are unprecedented, but in general the opportunities outweigh the challenges,” the ministry said.
Unlike the ministry‘s previous five-year plan, the latest focuses on controlling risks associated with imports and, in particular, called for more diversification in farm goods and energy.
The plan also noted the need to boost domestic consumption as part of the central government’s “dual-circulation” strategy, which focuses on growing the domestic market to offset an increasingly unstable external environment.
The ministry set a target to grow retail sales – a key indicator of private consumption – by an average of 5 per cent each year for the next five years, lower than the goal of “around 10 per cent” in the ministry’s previous five-year plan.
It also forecast trade to grow at 2 per cent annually and the total annual value of exports and imports to hit US$5.1 trillion by 2025.
The plan specifically mentioned deepening “all-round cooperation” with Russia in agriculture, as well as in big strategic projects and technological innovation.
During last year’s National People’s Congress, the government said it would focus on six areas to ensure “stability”, including food and energy security, particularly after supply chain disruptions caused by the coronavirus pandemic.
Authorities will also evaluate the nation’s industrial competitiveness over the next five years. The country will survey key economic sectors, strategic resources and technology associated with national security.
“Investment barriers are increasing, trade frictions have intensified. The global industrial chain and supply chain is being reforged, the trend of regionalisation and localisation has been obvious,” the commerce ministry said in the plan.
Under the plan, the ministry said it would scrutinise foreign investments more closely on national security grounds, but vowed to continue opening access to the Chinese market by reducing the negative list of restrictions on foreign investment to open up key sectors of the economy, including telecommunications, the internet, health care and capital markets.
Despite worsening relations with Washington, the commerce ministry said it planned to improve the China-US bilateral economic relationship over the next five years, including multilevel cooperation between Chinese provinces and US states.
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Ultimately, Beijing wants to enhance international cooperation and encourage developed Western nations to ease export controls on China.
On ties with the European Union, the commerce ministry said Beijing would build an institutional framework for cooperation with Brussels and push for the ratification of the EU-China Comprehensive Agreement on Investment.
The the document was silent on the phase one deal and, unlike the 13th five-year plan, it did not mention the US-China Strategic Economic Dialogue, the US-China Joint Commission on Commerce and Trade and bilateral investment treaties. There was no mention of the ongoing trade dispute with Australia.
