China’s eco­nomic guide set for 2018

China Daily European Weekly - - China News - Wang Yan­fei and Xin Zhiming con­trib­uted to this story. Con­tact the writer at xinzhim­ing@chi­

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.”

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