
Under US pressure, China is planning an economy that can survive a protracted war
- The prospect of all-round confrontation with America has invoked a Mao-era fighting spirit that is the driving force behind China’s 14th five-year plan
- Beijing’s vision of a ‘dual circulation’ economy is likely to emphasise technological self-reliance and growth targets based on quality, not quantity
But the five-year plan is one of the few potent remnants of that bygone era that Chinese leaders are determined to carry forward and expand. They have long argued that such forward thinking and planning have helped the country to become an economic powerhouse by combining capitalism and state controls.
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With officials drawing up the 14th five-year plan, which will run from 2021 to 2025, it has taken on a special importance.
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There has long been debate over the pros and cons of the five-year plans. Chinese leaders have argued that such plans have enabled the government to pool national resources to work on major projects. For instance, in the first five-year plan from 1953 to 1957, China planned 694 major industrial projects, including 156 aided by the Soviet Union with technology and manpower, ranging from steel to cement to chemicals. This laid the foundation for the country’s industrialisation.

Putting together a five-year plan is a mammoth project involving tens of thousands of officials and government researchers over a period of more than two years.
The preparations for the upcoming 14th plan began in late 2018 when officials from the National Development and Reform Commission, the powerful planning agency, began a midterm review of the current five-year plan while launching preliminary research for the next one.
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Since then, Xi has frequently mentioned that China needs to prepare for a new global situation where “unprecedented changes are taking place which have not been seen in the past 100 years”.

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While the plan is still being debated and drafted, several threads have become apparent.
One is that China is expected to set a lower economic growth target of 6 per cent or even less, compared to the average growth rate of 6.5 per cent in the current five-year plan. In fact, there have been debates on whether an annual growth rate is still needed as the country tries to pursue quality growth.
That probably means the government will need to greatly boost research-and-development spending, which accounted for 2.19 per cent of China’s gross domestic product in 2019, lower than the 2.5 per cent target listed in the current five-year plan. In fact, China also fell short of meeting its research-and-development spending target in the previous five-year plan (2011 to 2015). ■
Wang Xiangwei is the former editor-in-chief of the South China Morning Post. He is now based in Beijing as editorial adviser to the paper
