China's New Leading Agenda – What to Look For
It has been several months since China's temporary manifesto of its 5-Year-Plan agenda has been issued, and now the real thing is finally here. At the beginning of the month, over 5000 of China's political, business, and social elite met in Beijing for the Two Sessions annual meeting, in order to finalize and officially launch the country's 14th Five Year Plan.
Image by Global Times
5YP - 4 Main Pillars
Long-term sustainable growth
In this sense, the current 5YP is somewhat historic. For the first time since 1949, China doesn't focus on a specific GDP growth target.
Instead, China puts an emphasis on setting long-term targets to ensure that China is going through a stable and long-lasting development, with the aims of improving domestic economic conditions, boosting technological innovation and leaving sufficient room to cope with unexpected crises. Therefore, some of China's ambitious goals, like raising urban population, poverty alleviation, or becoming an innovative leader, are not confined to the next five years but are in fact planned for the next 15 years.
Self-reliance & Global-reliance
This balance is reflected in the plan's main theme, aka the “Dual Circulation Strategy”. It refers to a new economic model that consists of two complementing systems: enhancing Chinese technological self-efficiency and independence while at the same time maintaining an open-door policy towards foreign investors who can support China in fulfilling its vision.
China's dual commitment to the internal and external circles indicates that it is not abandoning its interests outwardly, but rather that it still has every intention of nurturing global business relations and attract foreign investments.
Innovation and advanced manufacturing
Amid the aggravating relations with the US and China's vulnerable position in the global supply chain during the Covid-19 crisis, it is now striving more than ever before to cultivate a burgeoning tech sector. That will allow China to enhance its competitiveness and value, reduce its dependency on overseas markets, and increase local consumption.
Therefore, the Chinese government is intending to invest massively in R&D and in the manufacturing sector, or more specifically, in eight priority areas such as robotics, high-end medical equipment, smart vehicles etc.
Green revolution
The words “energy” and “climate” appear in the plan's outline about 110 times, and are conceived as part of China's “new progress of ecological civilization”. In other words, according to the plan, about 25% of the indicators on economic and social development are related to environmental protection.
To measure China's green progress, it has set several tangible targets such as:
To reduce by 13.5% the nation's energy consumption per unit of GDP
To reduce by 18% the CO2 emissions per unit of GDP
To increase the share of non-fossil energy in total energy consumption to 20% by 2025
As 2021 continues to transform our world order, China's 14th five-year-plan (2021-2025) bears extraordinary meaning. And of course, any shift in strategy by the world's second-largest economy will have ramifications on both foreign and global businesses.
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