Tag Archives: 13th five-year plan

Xinhua Insight: Lawmakers approve China’s five-year plan against economic headwinds

BEIJING, March 16 (Xinhua) — Chinese lawmakers on Wednesday approved the country’s economic and social development blueprint for the 2016-2020 period, which sets targeted average annual economic growth at above 6.5 percent in the next five years.

A total of 2,778 lawmakers, or 97.27 percent, voted in favor of the five-year plan at the closing meeting of the annual session of the National People’s Congress (NPC).

China has set 2020 as the target year to realize the first “centenary goal” of building a moderately prosperous society in all respects, pledging efforts to double GDP and per capita personal income from the 2010 level before the Communist Party of China’s 100th anniversary of founding in 2021.

To this end, the five-year plan aims to keep medium-high growth in the next five years. By 2020, the size of China’s economy is expected to exceed 90 trillion yuan (13.8 trillion U.S. dollars), compared with 67.7 trillion yuan in 2015, according to the plan.

Addressing fellow lawmakers at the closing meeting, top legislator Zhang Dejiang called the 13th Five-Year Plan a document of “guiding importance” in the final stretch toward building a moderately prosperous society in all respects.

His words came amid rising economic headwinds in China, with uncertainties clouding global economic recovery.

China’s economy expanded 6.9 percent year on year in 2015, the slowest in a quarter of a century, weighed down by a property market downturn, falling trade and weak factory activity.

The government now hopes to shift the economy from the previous mainstay of exports and investment toward services and consumer spending.

According to the five-year plan, the reform and opening up drive will continue between 2016 and 2020.

China will push ahead urbanization and agricultural modernization, coordinate development in urban and rural areas, and work to improve the people’s well-being across the board so that all people can share the fruits of development.

An innovation-driven development strategy shall be implemented, while industries must be propelled toward medium-high end, the document read.

By 2020, advances should be made in core technologies such as information communication, new energy, new materials, aviation, biological medicine and intelligent manufacturing, it said.

The environment is another key priority in the 2016-2020 plan.

As binding targets, water consumption per 10,000 yuan of GDP will fall 23 percent by 2020, while energy consumption per unit of GDP will be cut by 15 percent. Carbon dioxide emissions will also be cut by 18 percent.

Major progress should be made on the China-proposed Belt and Road Initiative, and the service trade’s share in total foreign trade would be increased.

“The five-year plan has offered a clear roadmap for the fulfillment of our centenary goal,” said Liu Xiya, an NPC deputy.

In his government work report, Premier Li Keqiang said China had successfully fulfilled all the main tasks and targets set out in its 12th Five-Year Plan (2011-2015), setting a positive tone for the implementation of the new one.

Chinese can derive great confidence and a strengthened sense of unity from the country’s achievements, drawing on them to forge ahead on this new leg of the journey toward the Two Centenary Goals, he said.

His optimism was shared by Liu. “The next five years will mark the home stretch to 2020 target, and there is every reason to believe that we can deliver on those targets since our economic fundamentals are still sound,” she said.

The drafting of the new plan started early. A plenary session of the Communist Party of China (CPC) Central Committee last year was dedicated to review proposals for the five-year development blueprint and set its overarching principles.

A draft version of the plan was submitted to lawmakers for review at this year’s annual legislative session, during which dozens of changes were made.

Kan Ke, an official with the secretariat of this year’s NPC session, said the formulation of the final document was a very China-style political process: The proposition of the ruling Communist Party becomes the will of the state in a due course of legislative procedures.

He added that the drafting process was in line with the evolution of modern state governance, and is conducive to the implementation and enforcement of the Party’s decisions.

His words were echoed by Zheng Yongnian, professor and director of the East Asian Institute of the National University of Singapore.

Zheng hailed the consistency of China’s political and economic design in comparison with the West, where “a political party may make plenty of pledges before elections, but fail to deliver after coming to power.”

Kan agreed. “Coherence is the basis for our economic and social development. This is where our institutional superiority comes from,” he said.  Enditem

 

Editor  Xuefei Chen Axelsson

 

China Voice: Booming service sector will not replace industry

BEIJING, Dec. 8 (Xinhua) — It would be unwise, especially during an economic slowdown, for China to solely rely on the service sector, as it belittles the significance, and potential, of its industry.

While it is true that the service sector is outperforming industry in terms of the share of GDP, industry remains the backbone of the economy.

After all, services are dependent on the development of the industrial and agricultural sectors. To underestimate this relationship would result in an unsustainable economic model.

Manufacturing, especially the processing trade, was the main fuel firing China’s rapid expansion for the past decades.

Given the size of the economy, over-dependence on exports and credit expansion is no longer tenable. China needs to shift to a more consumption- and service-driven growth model to sustain growth, albeit at a slower rate, over the next decade and beyond.

The aim of such a transition, however, is to make the traditional industrial sector more competitive, rather than less significant.

To this end, programs such as “China Manufacturing 2025” and “Internet Plus,” aim to support the upgrading of the industrial sector by focusing on modernization and innovation, and to rebrand China from “the factory of the world” to a premier industrial power.

While the need to maintain its industrial might is influenced by its own development story, there are untold number of lessons to be drawn from developed nations.

The United States is one such example. Once the world’s largest industrial producer, in the 1980s it started to out-source manufacturing. The service sector not only flourished but actually replaced manufacturing as the backbone of the economy, eventually accounting for as much as 70 percent of the economy. Without the support of a real economy, it was only a matter of time before the bubble burst, triggering the 2008 mortgage crisis that spiralled into the worst economic disaster since the Great Depression.

The United States is now trying to claw back the lost advantages of its industrial sector. This time, however, by focusing on innovation it aims to create a stronger sector that is able to compete globally.

Alexander Hamilton, one of America’s founding fathers, once said, “not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufacturers.” That judgement still holds true for today’s China. Enditem

China Focus: New engines to bolster growth in next 5 years

   BEIJING, Dec. 8 (Xinhua) — To ensure a medium-high level of economic growth for the next five years, China has moved to foster new growth engines as old ones lose steam.

China’s exports dropped by 3.7 percent in November, the fifth straight month of decline, to 1.25 trillion yuan (195 million U.S. dollars), customs data showed Tuesday.

In recent years, old growth engines, including exports and investment, lost momentum partly due to weak demand at home and overseas. The country’s quarterly GDP growth slowed to a six-year low of 6.9 percent in the third quarter of this year.

In the next five years, the country’s annual growth rate should be no less than 6.5 percent to realize the goal of doubling the GDP and per capita income of 2010 by 2020.

To attain that goal, the government must cultivate new growth engines to bolster growth in the next five years.

EMERGING INDUSTRIES

As traditional industries including steel, coal and cement sectors are facing excessive capacity, China is moving to tap the potential of new industries with bright prospects.

A proposal for formulating the country’s 13th five-year plan unveiled last month said that China will step up researches on core technology concerning the new generation of telecommunications, new energy, new material and aviation, and support the development of new industries, including energy conservation, biotechnology and information technology sectors.

In Changzhou, a city in eastern China’s Jiangsu Province, there are more than 50 companies producing graphene, a new material that widely used in high-end equipment manufacturing, forming a national level production base for the material. Products made by Changzhou Tanyuan Technology Co. are used in smartphones. The company’s sales have risen from 6 million yuan to more than 200 million yuan in only three years.

Qi Chengyuan, head of the high-tech division of the National Development and Reform Commission (NDRC), said China will turn new strategic industries into major driving forces for economic growth in the next five years.

The country should form five new pillar industries that each have a potential of becoming a 10 trillion yuan industry, including information technology, bioindustry, green industry, high-end equipment and material, as well as the creative industry, Qi said.

ENTREPRENEURSHIP AND INNOVATION

New impetus must also come from the government’s emphasis on mass entrepreneurship and innovation.

In the first three quarters, China’s newly registered companies rose 19.3 percent to 3.16 million, as the country pushed for easier registration to promote innovation.

Innovation is the most important impetus for China’s growth, according to the proposal for formulating the 13th five-year plan.

A good example is the strong growth in Shenzhen, a national demonstration zone for independent innovation. In the first 10 months, the proportion of R&D investment in Shenzhen’s regional GDP was more than 4 percent, nearly doubles the national average.

The city’s economic growth stood at 8.7 percent in the first three quarters, higher than the country’s growth of 6.9 percent in the same period.

imagesThe Shenzhen-based Huawei Technologies Co., Ltd. has set up 16 overseas R&D institutions and owns a total of 76,687 patents, said its CEO Ren Zhengfei.

The company realized a sales volume of 288 billion yuan last year. Ren forecast that the company will more than double that sales figure by 2019 on the back of constant innovation.

Song Weiguo, researcher with the Chinese Academy of Science and Technology for Development, said that technological innovation will provide greater impetus for growth in the next five years.

REFORMS ON SUPPLY SIDE

Structural reforms on the supply side will lend more steam to sustainable growth, President Xi Jinping said last month at a meeting of the Central Leading Group for Financial and Economic Affairs.

Xu Lin, head of the NDRC’s planning division, said reforms on the supply side, which means sustainable growth instead of short-term demand management, is necessary for cultivating new growth impetus.

An important aspect of supply side reforms is government efforts to streamlining administrative approvals and delegating power to lower levels.

From early 2013 to the end of September 2015, the central government has canceled or delegated 586 kinds of administrative approval.

In the economic and technological development zone of Nanning, Guangxi Zhuang Autonomous Region, the bureau in charge of administrative approvals cut the red tape and reduced the time needed for getting an approval from more than 300 days to 20 days.

On the supply side, China should maintain structural tax reductions to boost the service and advanced manufacturing sectors and support small enterprises, and push forward entrepreneurship and innovation, Premier Li Keqiang said earlier this month.

China will keep cutting red tape to foster emerging industries and speed up the overhaul in traditional industries to improve efficiency, Li said.

With new impetus from China’s reform pushes, the country will be able to realize an average annual growth of 6.5 percent in the next five years, said Yu Bin, researcher with the Development Research Center of the State Council. Enditem

 

 

China Focus: China’s local gov’ts eye “Belt and Road” construction in 2016-2020

BEIJING, Dec. 11 (Xinhua) — Nearly 20 provincial governments in China have rolled out their local development plans for the 13th Five Year Plan period from 2016 to 2020, with their focus on the “Belt and Road” construction, the Shanghai Securities News reported on Friday.

Under their development plans, they attach great importance to infrastructure construction in transportation industry and construction of industrial parks.

 

— Focus on transport infrastructure

Chinese local governments will give priority to transport infrastructure when promoting the “Belt and Road” initiative.

For example, Shaanxi province will be guide by construction of a logistics center to build a seamless transport network in 2016-2020. Guangxi Zhuang Autonomous Region also said in its proposal to the 13th Five Year plan that it will build a convenient and efficient railway network, expressway network, water transport network, airline network and information network with the Association of Southeast Asian Nations (ASEAN) and neighboring provinces.

It is worth noting that in the land transportation field, the China-Europe express railway will play an increasingly important role in “going global” of Chinese goods.

As a core area of the 21st Century Maritime Silk Road, Fujian province plans to build important airline hubs for Southeast Asia and advance construction of a regional port-shipping system and communication network facilities, to smoothly connect the land channel of the Silk Road Economic Belt and form a passage to sea for central and western China’s opening-up.

Jilin province in its 13th Five Year plan noted that it will actively explore the Arctic Ocean ship routes linking the Europe and the U.S.A., steadily operate international rail and water transportation lines linking Japan and South Korea, and further expand its outward transport lines.

Meanwhile, Tianjin will make full use of its unique geographic location advantages to vigorously promote port and maritime strategic cooperation. It will develop cross-border logistics through three land ports, like the Khorgos Port and develop maritime transport through intensive ship routes and shipping flights.

Zhejiang province announced to promote construction of a marine economic development demonstration zone and Zhoushan Islands New Area, and build a port economic circle covering the Yangtze River Delta, influencing the Yangtze River economic belt and serving the “Belt and Road” initiative.

In addition, Gansu province decided to invest more than 800 billion yuan from this year to build more than 70,000 km of roads and railways in six years.

 

— Efforts in industrial park construction

Industrial park construction is also a focus in the 13th Five Year plans of the provinces.

Xinjiang Uygur Autonomous Region said that it will accelerate construction of core areas in the Silk Road Economic Belt, develop high-level open economy, and quicken the pace to build the Kashgar and Khorgos economic development zones and comprehensive bonded zones.

Because of the “Belt and Road” initiative, ALaShankou has invested a lot in infrastructure, promoting rapid development of its comprehensive bonded zone, said Pan Zeming, deputy director of the ALaShankou Comprehensive Bonded Zone.

In its 13th Five Year plan, Fujian province made it clear to promote construction of important commodity export bases, commodity markets and commerce and trade parks and explore mutual establishment of industrial parks with Southeast Asian countries.

Chongqing municipality pointed out that it will actively participate in construction of overseas industrial agglomerations and economic and trade cooperation zones.

Shaanxi province said it will encourage and support competent enterprises to go abroad for transnational operation and strategic acquisitions and build Shaanxi industrial parks overseas especially in Central Asia and Africa. Meanwhile, it will also build economic cooperation zones and high-tech industrial parks to attract investments of the transnational companies and globally leading enterprises and persuade them to build regional headquarters and branches in Shaanxi.

“Industrial park is an important method for “going global” of Chinese enterprises. It is a new form for Chinese enterprises to build “Belt and Road” and also a way to change simple cargo transportation”, said Hu Zheng, chief representative of the Central Asia Representative Office of the China Merchants Group.

Since the beginning of the year, China has quickened its pace of building industrial parks along the “Belt and Road” countries.

Data of the Ministry of Commerce shows that so far, China has already built 118 economic and trade cooperation zones in 50 countries, of which 77 zones are located in 23 countries along the “Belt and Road”. Enditem

 

 

 

Xinhua Insight: China to start reform focused on quality of life

 BEIJING, Dec. 11 (Xinhua) — With China’s 13th Five-year Plan beginning next year, the focus of reform will start with addressing the quality of ordinary people’s lives.

At the latest meeting of the central leading group for comprehensively deepening reform on Wednesday, the leadership decided to implement the five development ideas put forward at the plenary session of the Communist Party of China (CPC) Central Committee in late October: innovation, coordination, sharing, environmental protection and openness.

At the beginning of the 13th Five-year Plan, efforts need to be “focused on building a moderately prosperous society,” said a statement issued after Wednesday’s meeting.

The group approved several reform measures, one of which is that unregistered citizens are to be given household registration permits known as “hukou,” a crucial document entitling them to social welfare.

China has around 13 million unregistered people, one percent of the entire population. They include orphans and second children born illegally during the period of strict enforcement of the one-child policy, the homeless and those who have yet to apply for one or who have simply lost theirs. Those parents who violated family planning policy often refrained from getting hukou for their children to avoid fines.0   “It is a basic legal right for Chinese citizens to register for hukou. It is also a premise for participation in social affairs, to enjoy rights and fulfill duties,” the statement said.

Wan Haiyuan with an institute of macro-economics of the National Development and Reform Commission said the difficulty lies not in hukou itself, but in related matters such as healthcare, health insurance and education.

In China, various social benefits such as medical insurance and access to basic education are based on this permit and are supposed to be in line with long-term places of work and residence.

Many people without household registration have moved to cities and become tramps. According to Wan, their birth certificates might have been lost and authorities must address this issue. Those who have come to China to seek asylum should also be taken into consideration, as they are permanent residents, despite their lack of Chinese nationality.

Education is also central to plans for the next five years, said Zhang Li, director of the Ministry of Education’s development center. The reform meeting statement declared that education should advance innovation-driven development and serve the objectives of the Belt and Road Initiative.

Zhang added the statement showed that opening up in education should take the concepts and experience of developed countries as reference.

The meeting decided to integrate basic medical insurance for urban employees and the new rural cooperative medical scheme, creating a unified basic health insurance system.

Currently China has three separate medical insurance schemes — basic medical insurance for urban employees; the new rural cooperative medical scheme; and basic medical insurance for city dwellers not covered by the first two schemes, mainly the young or unemployed.

The three schemes have been perceived as unequal for a long time, as the benefits in urban areas are much greater than those in rural parts of the country.

“Even members in one family may have different health insurance,” said Meng Qingyue, a professor in health economics with the Peking University. “The integration of different medical insurance schemes is a must for achieving equal access to basic health care for every one.”

Another measure is the reform of government’s “power list.” Since the 18th National Congress of the CPC in late 2012, administrative powers have been streamlined and delegated, with hundreds of items abandoned.

Ma Qingyu of the Chinese Academy of Governance said the power and responsibility list system can clarify responsibilities of different departments and prevent them from shirking their responsibilities or taking responsibilities that are not rightfully theirs.

“It will make the border between public powers and private rights more clear,” said Ma. Enditem

 

 

 

News Analysis: China five-year plan to chart reform, growth path

BEIJING, Oct. 28 (Greenpost) — China is mulling the 13th five-year plan, which will chart its reform and growth path, when the country is entering a “new normal” of slower growth and boosting re-balancing towards consumption and services.

The new five-year period from 2016 to 2020 will be key for reforms, which can facilitate economic growth, including reforms on tax and fiscal policy, state-owned enterprises and finance, according to China International Capital Corporation (CICC), one of China’s leading investment banks.

Leaders of the Communist Party of China (CPC) met in Beijing on Monday for a four-day meeting to discuss changes, while the fifth plenary session of the 18th CPC Central Committee will review proposals for the five-year plan. After taking into account the proposals, a final plan will be ratified by the annual session of China’s top legislature in March 2016.

The biggest challenge for the 13th five-year plan may be capping the runaway financial sector without hammering growth, according to Bloomberg research.

More financial market reforms are expected to be included in the new plan to encourage risk-taking and stoke growth for small and medium businesses.

Non-traditional financial services may be allowed a greater role in the economy to cut reliance on the state-owned mega-banks and their traditional deposit taking and lending function, it forecast.

Newly-packaged financial intermediation services such as peer-to-peer lending, crowd funding, Internet-based financing, asset securitization, derivatives and corporate bonds are likely to be a regulatory focus and encouraged, it said.

The more meaningful function of the meetings is prioritization of various policy targets, especially considering China’s economic growth has continued to decelerate, settling at 6.9 percent during the third quarter of this year, said Zhu Haibin, chief economist for J.P. Morgan China.

Like in previous five-year plans, a GDP growth target is likely to be included. The market estimates the growth target for 2016-2020 will be put between 6.5 and 7 percent.

The market interprets the growth target as an important indicator of how leaders will prioritize growth and structural re-balancing, Zhu said.

If the growth target is lowered to 6.5 percent, it implies the government will tolerate slower growth to leave more room for structural re-balancing. Accordingly, there will be less stimulus efforts by the government. If the target is left unchanged at 7 percent, it implies the government will have to maintain its loose policy stance and do more easing, and perhaps at the cost of structural re-balancing, Zhu said.

Not surprisingly, no one seems to consider a growth target below 6.5 percent, as China’s target to double GDP between 2010 and 2020 will require the average GDP growth in 2016-2020 to be 6.5 percent, he added.

The previous five-year plan in 2011-2015 set an average annual growth target of around 7 percent. Between 2011 and 2014, the economy expanded by an annual rate of 8 percent. Enditem

Source Xinhua

Editor  Xuefei Chen Axelsson