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Party Congress Signals a New Beginning

Oct 25, 2022
  • Xu Hongcai

    Deputy Director, Economic Policy Commission

The report to the 20th Congress of the Communist Party of China fully embodies the coherence and consistency of China’s policies. It charts a course by which China can build a modern socialist country for decades to come and boosts the confidence of the international community and global markets.

Since the outbreak of war between Russia and Ukraine, both the external environment and internal conditions affecting the Chinese economy have changed. The UN-centered global governance system has faltered, while international relations based on economic and trade cooperation have been sabotaged. All this has adversely affected China’s industrial and supply chains, as well as its economic security — food and energy security included.

The World Bank and the International Monetary Fund have once again downgraded their forecasts for the Chinese economy and the global economy as a whole. The current world economy is characterized as “low growth, high inflation, high unemployment, high leverage and high risk.”

The Chinese economy is blighted by lack of impetus, with frequent COVID-19 outbreaks, supply chain disruptions, difficulties facing the job market (particularly micro, small and medium-sized enterprises), the continued bleakness of the property market and a sharp decline in import and export growth. In particular, domestic demand remains subdued as consumer confidence has tumbled.

Under these circumstances, China’s focus on modernization, deepening reform and opening-up — and on high-quality development — has been reiterated at the 20th Party Congress, injecting vitality into the troubled world economy.

The report continues the basic line of thinking behind China’s policies for the past decade, with insistence on high-quality development to integrate domestic demand expansion with efforts to deepen supply-side structural reform. Efforts will be made to boost the dynamism and reliability of the domestic economy while engaging in the global economy at a higher level, to build a modernized economic system. In addition, China will raise total factor productivity and make industrial and supply chains more resilient and secure.

First, the 20th Party Congress underlines the importance of continuing with new development concepts and promoting development that is innovative, open, coordinated, green and inclusive. It also gives priority to common prosperity and green lifestyles. China’s carbon peak and neutrality targets are a key issue highlighted in the report.

Second, science and technology should remain China’s primary productive force, with talent as its primary resource and innovation as its primary driver of growth, as the country builds self-reliance in technology. China should amass efforts to drive breakthroughs in core technologies.

Third, China will unswervingly develop its socialist market economy, giving full play to the decisive role of the market in the allocation of resources while giving better play to the role of the government. Encouraging fair competition, pressing ahead with market-based reforms of production factors and building a unified market system to boost economic circulation are important steps.

Fourth is forming a modern industrial system by buoying the real economy — in particular developing applications in digital and intelligent technologies. Accelerating the modernization and industrial upgrading of the primary, secondary and tertiary sectors is a priority. In addition, integrated urban and rural development and the coordinated development of different regions are keys to China’s growth.

Fifth, domestic demand will be boosted further to drive China’s economic growth via an optimized investment structure and expanded consumer demand. China, with its population of more than 1.4 billion, has an enormous consumer market. The country will continue implementing its employment-first policy, encouraging the development of micro, small and medium-sized enterprises and raising the incomes of both urban and rural residents.

Last but not least, China will open its door wider to the world by fully implementing the “two resources, two markets” strategy to underpin high-quality development. Cooperation on specific projects should be revved up. What’s more, China should attain greater influence on the global stage. The country will deepen reforms to delegate power, streamline administration and optimize government services while fostering a world-class business environment that is market-oriented and law-based to attract foreign investment.

As the world’s second-largest economy and a permanent member of the UN Security Council, China has, as always, been safeguarding the global governance system with the UN at its core. It stays the course of inclusive development and pledges to play a constructive role in creating a strong, balanced, inclusive and sustainable world economy.

In the Asia-Pacific region, China is willing to participate in multilayered international cooperatives, such as the Regional Comprehensive Economic Partnership, the Comprehensive Progressive Trans-Pacific Partnership and the Indo-Pacific Economic Framework. China objects to decoupling, delinking, sabotage to the division of labor and any hindrance of global development. Instead, it firmly supports cooperation initiatives and frameworks conducive to regional and global prosperity.

In a nutshell, China’s achievements over the past four decades of reform and opening-up have built confidence in its future development. I believe that after the 20th Party Congress, China’s relations with the U.S., Europe and Japan will gradually improve, and economic and trade cooperation will resume its role as the cornerstone and propeller of international relations.

China will continue pushing forward cooperation with countries and regions involved in the Belt and Road Initiative. I believe the crux of the future world economy lies in Asia, and that major opportunities will flow through China. 

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