China’s economic guide set for 2018
Xi Thought on socialist economy put forward for the first time at annual work conference
Chinese Characteristics for a New Era, which mainly focuses on a new development concept and stresses the Party’s leadership in economic management, people-oriented development, the new economic normal, the market’s role in resource distribution and supply-side structural reform.
The thought is the “theoretical crystallization” of the past five years of practice in pushing forward China’s economic development, and the “latest fruit” of socialist political economy with Chinese characteristics, according to a statement released after the meeting.
Those at the meeting decided that high-quality development is the “indispensable foundation for sustainable and healthy economic development”. Apart from efficient economic growth, analysts said, high-quality development also entails balanced social and environmentally friendly development.
In the report that he delivered to the 19th National Congress of the Communist Party of China in October, Xi said the world’s second-largest economy was evolving from a phase of a high rate of growth to a stage of high-quality development.
At another high-profile meeting, Xi said the country will address three major tasks: targeted poverty reduction, controlling pollution and prevention of major financial risks.
“China’s strategy now is to shift to more intensive rather than extensive growth, and that transition will deliver more prosperity, both in China and abroad,” says Fredrik Erixon, director of the Brussels-based European Centre for International Political Economy.
John Litwack, World Bank Lead Economist for China, says: “We at the World Bank have high expectations for the Central Economic Work Conference. We expect that the focus will be on a specific policy and reform framework that will echo the priorities expressed at the 19th National Congress of the CPC in October.
This includes a stronger emphasis on the quality, as opposed to quantity, of growth and the mitigation of macroeconomic risks.”
To improve quality of growth, China needs to work on a series of systemic arrangements to facilitate achievement of that task, he says.
“We would, therefore, expect more emphasis on policies and programs to achieve deleveraging, greater efficiency in the public sector, a cleaner environment, improved public services for the population and a stronger business environment.”
Apart from dealing with economic sustainability, high-quality development also means socially and environmentally sustainable development, says Yukon Huang, senior fellow of the Asia Program at the Carnegie Endowment for International Peace.
With the country “having reached upper-middle-income living standards, the 19th National Congress of the CPC rightly shifted the emphasis toward quality, and by quality, the leadership is emphasizing the need to make the growth process more socially and environmentally sustainable.”
Huang says China’s shift to a more sustainable and socially sensitive growth path has been underway for many years. “But now I sense a more concerted effort to address these issues.”
Analysts also say China’s shift of focus to dealing with the three major tasks next year will help improve its ability to innovate.
China’s approach to address major risks, poverty and pollution, “could set a global standard for using the major challenges of our time as drivers for innovation”, says Dennis Pamlin, senior adviser at the Research Institutes of Sweden. “With this new initiative, China could actually shift the global innovation focus.”