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Quality Growth Needed to Build a Prosperous Society

Mar 24 , 2016
  • Niu Li

    Director of Macro-economy Studies, State Information Center

To better understand the gist of China’s 13th Five-Year Plan (2016-2020), it is important to know how different this national roadmap of economic development and social progress is from the previous ones. Such a difference is characterized by the shift in growth rate from high speed to a medium-high level, in industrial structure from low-end to middle- and high-end, in driving power gradually from managed input to primarily by innovation.

As a result, the core idea about development this plan tries to convey can be described as being innovative, balanced, environmentally friendly, inclusive and accommodating. Rather than emphasizing the speed of economic growth, the quality of growth is what this plan aims to achieve, because China has entered what is called a period of new normal. It means that both the domestic and international situation has made it imperative for China to shift the focus of its development. In light of both the domestic and international situations, the way economic development and social progress have been sustained for more than three decades can hardly continue to lead the country to what it wants to achieve. To be frank, the old roadmap has proved unsustainable and further reform is essential for economic growth to be sustainable and healthy.

In the period of the new normal, the 13th Five-Year Plan will try to promote economic growth by increasing consumption rather than depending on investment and export, while innovation will be promoted to upgrade manufacturing and other industries. In the coming five years, new industries, new forms of economic activities, new economic organizations, new markets and new models will be introduced. New energy motor vehicles, intelligence industries and Internet-plus will be developed. A batch of big projects and infrastructure schemes closely related to basic public services will be developed in a market-oriented manner.

The economic development and social progress must be well-coordinated, which means that policies will be made by taking into consideration the factors of population, resources and environment. Family planning policy has already been adjusted to allow couples to have two children to make the country’s population structure sustainable. As far as the use of natural resources is concerned, policies aim to raise the efficiency of their use while great attention will be paid to protecting the environment. In other words, greater emphasis will placed on the environmental friendliness of the economic development in the coming five years.

Another emphasis of this plan is to be inclusive and accommodating, which means the same importance will be attached to the further development of a social security net to guarantee that basic needs for a decent living standards for disadvantaged residents will be met.

In addition, policies will be made to reform the mechanism for the distribution of social wealth. Facing an increasingly widening gap of income, it is essential for the country to adjust its policies related to the distribution of social wealth so that social wealth can be distributed in a fairer manner and the majority of residents will be able to enjoy the fruits of economic reform.

The 13th Five-Year Plan represents a key period for China’s goal of building a prosperous society in an all-round manner. By the year 2020, the year that marks the 100th anniversary of the founding of the ruling Communist Party of China, this objective should be achieved, which means that the country’s GDP will have to maintain a growth rate of 6.5 percent while residents’ disposal income increases at the same rate. Given the poor performance of the global economy and the slow-down trend of domestic economy, it is obviously no easy job to achieve such growth rates. Yet, given the range of potential that China can still tap and the experience of gaining a growth rate of 7 percent despite the financial crisis during the 12th Five-Year plan period from 2011-2015, Chinese government is confident in achieving the target.

To achieve China’s goal of uplifting the overall quality of its economy and the life quality of its people, 25 specific target areas have been stipulated in the plan, and 13 of those are mandatory achievements for the government during the five years. They include the intensity of water use, energy use and emission of carbon dioxide, which are required to drop respectively by 23 percent, 15 percent and 18 percent per unit of GDP by the year 2020. Behind these restraining specific targets is the shift of government’s emphasis on development from quantity to quality.

So it is important to maintain the 6.5 percent of economic growth, but it is even more important to keep such a growth rate sustainable. Economic growth at the cost of environment, growth with a widening polarity of wealth and growth only with good-looking figure without substantial improvement of the quality of life for the majority of residents is definitely not what this new five-year plan intends to achieve.

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