Seeking High-Quality Economic Growth

by+Nancy+Gong

At what rate will the Chinese economy grow in the next five years？ The Proposal of the CPC Central Committee for the Formulation of the Thirteenth Five-Year Plan for National Economic and Social Development covers a wide range of topics， among which the development plan of the national economy is at the core and， therefore， it has been thrust into the limelight. This proposal indicates that the goal is to maintain economic growth at medium-to-high rate and double Chinas 2010 GDP and per capita income of both urban and rural residents by 2020.

“New Normal”

Every five-year plan has a unique focus. While working on the 11th Five-Year Plan， China entered the WTO but was faced with its relatively weak innovative ability and problems concerning agriculture， rural areas， and farmers； when initiating the 12th FiveYear Plan， the country was confronted with an international financial crisis， inappropriate industrial structure and uncoordinated development of local economies.

Hu Angang， director of the Center for China Studies of Tsinghua University， points out that the 13th Five-Year Plan faces a changing environment. The country should upgrade its current ex- tensive way of development after years of fast industrialization and growth when its economy has entered the “new normal” period. In fact， as early as the 2014 Central Economic Work Conference， President Xi Jinping stressed that ideas about growth in the following five years are to adapt to， make use of， and bring in the “new normal” phase – a time when Chinas economic goals become clear， namely， a more appropriate industrial structure and a fairer balance between consumption and investment.

Similar to the blueprint for deeper reform put forth two years ago at the Third Plenary Session of the 18th CPC Central Committee， the 13th Five-Year Plan is a systematic and major document concerning Chinas economy， society and policies， but， unlike that blueprint， the Plan places more emphasis on growth.

Because this plan is composed of various topics， much effort has gone into its preliminary research and compiling， and its general ideas have been released long before. On May 27， 2015， when inspecting Zhejiang Province， President Xi outlined the 13th Five-Year Plans 10 goals： maintaining economic growth， changing the mode of development， adjusting industrial structure， promoting innovation， modernizing agriculture， reforming institution and mechanism， coordinating development， promoting ecological progress， improving peoples livelihood， and alleviating poverty.

The first of the goals is maintaining economic growth， based on which the 13th Five-Year Plan sets a medium-to-high growth target. Rather than the growth rate， the plans stress is more on the quality of growth and the balanced development of society， highlighting innovation， coordinated and green development， openingup and inclusiveness – all considered a profound reform crucial to the whole development of China.

Healthy Way to Develop

In this “new normal” phase， when Chinas economy decelerates， how policies facilitate the healthy development of the economy is the focus of the 13th Five-Year Plan.

The plan focuses on the five years from 2016 to 2020. According to the goals set in the 18th CPC National Congress， China should build a moderately prosperous society in all respects by 2020， which would require doubling the countrys 2010 GDP and per capita income of both urban and rural residents. To double the two figures， which is a serious economic goal， by rough estimate， Chinas GDP should increase at an annual rate of 6.5 percent.

Figures from the National Bureau of Statistics show that Chinas economy has expanded 6.9 percent in the first three quarters of 2015， falling below 7 percent for the first time in years. Given this decline， it is a concern whether it is possible to ensure a healthy growth rate so as to realize the goals set for the next five years.

According to the proposal， China will build its network of economic axes along coastal lines， major rivers and main roads， while establishing and enhancing several major economic zones. This year， China has accelerated the development of its local economies and released a series of important plans and policies for regional development. With the development of “Four Major Regions” （east， central， west and northeast） and “Three Supportive Belts” （the Belt and Road Initiative， coordinated development of the Beijing-Tianjin-Hebei area， and Yangtze River Economic Belt）， the regional economic imbalance is being undone， and some western provinces are growing at a rate faster than that of eastern ones. This new pattern of growth has become a great driving force for regions to develop at different rates and is the foundation of some important policies in the 13th Five-Year Plan.

But the high-quality and efficient growth of Chinas economy lies more in innovation in the private sector and the sectors success in international competition.

An expert of the 13th Five-Year Plan Research Group and director of Macro-Economy Department of Development Research Center of the State Council， Yu Bin says that the most crucial idea about development in the 13th Five-Year Plan is to drive growth through innovation. This way of development can reverse Chinas unfavorable situation in the international division of labor， move China upward along the industrial chain， from the low end to the mid-and-high end， and establish the countrys advantages in manufacturing high value-added and high-tech products， which is also the main purpose for reform. After the promulgation of the plan at the Third Plenary Session of the 18th CPC Central Committee in 2013， major reforms have been carried out in the past two years， step by step， with reforms in finance， land， and state-owned enterprises as priorities. This reform will still be an important task for the Chinese government in the years to follow.

Moreover， the proposal indicates that while adhering to the opening-up policy， China should integrate deeper into the global economy. In the meantime， while pledging to open itself wider to the outside world and implementing the development strategy of the Belt and Road Initiative， the country will export more production capacity， strongly promote highly-competitive new products such as high-speed rail facilities， and take part in high-level international economic cooperation.

Overall， the 13th Five-Year Plan aims to further boost economic upgrading， thereby achieving high-quality economic growth.