Plan to propel balanced development

Editor's Note: The 14th Five-Year Plan (2021-25) is important not only for China’s economic development in the next five years but also the country’s overall development through to 2035. In the background of the COVID-19 pandemic and Sino-US conflicts, some leading academics analyze the challenges and opportunities facing China. Excerpts follow:

Need for balanced regional development

The 14th Five-Year Plan (2021-25) is crucial to China’s development in the coming 10-plus years, especially because China’s external environment may further deteriorate and its exports further decline even after the novel coronavirus pandemic is contained.

China’s overall export performance in the third quarter of this year looks pretty good. But that could be a short-term phenomenon, because the epidemic has reduced the production capacity of many countries, whereas China has managed to contain the virus and thus gain a bigger market share in the short term.

Objectively speaking, the following three global trends are unlikely to change in the short term. First, global economic downturn will lead to a decline in global consumption, which means the international market for China’s exports will further shrink.

Second, as the international environment for China’s development worsens, and trade frictions between China and the United States escalate, other forces and voices unfriendly to China will intensify their efforts to detach China from the global industrial chains so as to reduce its globalization dividends.

And third, the “economic blockade” imposed by the US-led Western countries will have an impact on Chinese high-tech enterprises such as Huawei.

All this means that even if China reaches a development stage mainly built on the “domestic circulation” development pattern, its “external circulation” may still not be optimistic.

A country’s economic development is mainly built on its domestic market, which in turn depends on the size of its population. Shaanxi, Sichuan, Hunan, Hubei and Henan provinces, for example, have a combined population of nearly 400 million that, if their radiated population is included, may account for half of China’s total population, which means huge market potential to tap.

The pandemic has made countries realize they should not rely solely on international trade for development and instead encourage the return of industries or accelerate industrial transfer. These changes may have a direct and long-term cyclical impact on China’s eastern coastal cities whose economic backbone is foreign trade.

Due to the constraint of geographical conditions, population size and other objective factors, China’s western region still doesn’t have the needed conditions and space to develop into a national economic pillar compared with the central region. The southeast coastal region has long remained an economic leader, but strategic considerations for national security require the country to not put all the “eggs” in one basket and transfer some to the more stable central region.

Given that the western region’s economic development is relatively weak, if China wants to achieve balanced development, it needs to first cultivate large city clusters in the central and western regions to accelerate the development of the western region.

Yi Peng, president of the Pangoal Institution

Raise low-income groups’ earnings

The plenary session has set the longterm goal of “basically realizing socialist modernization by 2035”, and China should make more efforts to make its voice heard and to run its own affairs.

The country needs to promote consumption, advance domestic circulation and expand the middle-income group. To promote “domestic circulation”, it must improve the income level and spending capacity of the low-income groups because whether “domestic circulation” can run strongly largely depends on the income growth of the low-income people, whose increased income will raise their consumption. The key to “domestic circulation” is to not stimulate the production of enterprises, but to ensure the improvement of people’s consumption capability.

Ye Qing, a professor at Zhongnan University of Economics and Law, and an academic member of the Pangoal Institution

Science and technology must drive development

The Fifth Plenary Session of the 19th Communist Party of China Central Committee gives a clear direction for China’s economic development — such as in the face of changing domestic and international environments, which offer both opportunities and challenges, how the country can develop into a modern industrial economy, and optimize and upgrade its economic system, especially how it can become a manufacturing and digital power, and a higher-quality economy.

The country should use science and technology to drive its economic development. Over the past decade, a main driver of global and Chinese economic and social development has been science and technology, with 5G technology and artificial intelligence being the most important. Under the influence of these two important drivers of digitalization of society, China has accelerated the development ranging from “atom economy” to “bit economy”.

However, the development of the digital economy has created challenges along with opportunities. Since 2019, the dramatic changes in the global political landscape have posed a huge challenge to the past development model. Given the threats to national and economic security, national interests and global stability, the first World 5G Convention said there is a need to consider the security of global digital technologies with 5G network as the core. Many Western countries are prejudiced against and opposed to China developing 5G technology, and China should take this challenge seriously.

Since the international political and technological environment is fraught with discrimination and prejudice against China, the country should especially focus on two areas. First, it should grasp the core of data governance and make top-level designs while, based on the strategy of becoming a data power, it should set up a data decision-making and coordination mechanism at the highest national level.

And second, it should build new platforms to promote international consensus, and further deepen cooperation with influential international organizations so that professionals who truly understand security and the digital economy can make decisions and suggestions on international platforms and raise objective and correct concerns.

Ge Qi, deputy secretary general and academic member of the Pangoal Institution

Innovation at the core of modernization

The communiqué issued after the plenary session is full of new ideas. For example, the authorities have extended China’s development goals beyond the 14th Five-Year Plan period to 2035, making it a medium- to long-term plan that links the two centenary goals.

The communiqué also puts “innovation” at the core of China’s overall modernization drive. It can be predicted that innovation, especially continuous innovation in science and technology, along with efforts to become self-reliant, will become a decisive factor and strategic support for China’s socioeconomic development.

While attaching great importance to “innovation”, the communiqué also says that China should pay particular attention to the world’s frontier science and technology areas, main economic battlefields, the country’s major needs, and the lives and health of the Chinese people. These are the most important lessons China has learned from the COVID-19 pandemic, and an important part of the Chinese authorities’ people-centric governance philosophy that focuses on people’s lives and health while promoting innovation.

Li Zhiqi, vice-president of Beijing Federation of Industry and Commerce, and a senior research fellow at the Pangoal Institution

Study major public health challenges

The COVID-19 pandemic is by far the world’s biggest “black swan” event since the founding of New China. In fact, UN Secretary-General Antonio Guterres has said the pandemic is the biggest global challenge since World War II.

The novel coronavirus, whose source is yet to be identified but which spread quickly across the globe, has had an unprecedented impact on the world. Judging from its trend, it is hard to say whether the world can contain the pandemic this year or next year.

The pace of vaccine development does not match the spread and impact of the virus. The virus could continue affecting people around the world for two to three years. So there is a need to study the major public health challenges during the 14th Five-Year Plan period keeping in mind the speed at which the virus has spread.

According to international organizations, almost all major economies, except China, will register negative growth this year. For example, the International Monetary Fund has forecast that global GDP will decline by 5-6 percent this year. Given the global economic recession, therefore, China should not be too optimistic about realizing all the goals during the 14th Five-Year Plan period.

China needs to be fully aware of the impact of the trade war and technology war the US has launched. The impact of the Sino-US conflicts will be far-reaching and the trade and technology wars are likely to worsen after the end of the epidemic.

But we should keep in mind the fact that China’s economic fundamentals and basic trends will improve in the long run, and Sino-US conflicts will not stop China’s economic advancement despite having had a huge impact on the country. China is the world’s second-largest economy, with GDP of more than 99 trillion yuan ($15.02 trillion) and per capita GDP of over $10,000.

It also has the most complete industrial system in the world, and is the world’s largest trader in goods, largest foreign exchange reserve holder, and the secondlargest foreign investment recipient and outbound investor — and has the world’s largest and most promising consumer market. These facts, along with its huge economic aggregate and resilience, will increase its ability to resist short-term risks.

Liang Qidong, deputy head of Liaoning Academy of Social Sciences, and an academic member of at the Pangoal Institution

Much more important than previous plans

The 14th Five-Year Plan cannot be compared with the previous five-year plans, because it is linked to long-term development goals through 2035, and holds more strategic significance. It not only sets the course of action for the next five years, but also links the past and the future, laying down the path to basically achieve socialist modernization.

The plan signifies China’s improving governance system and capacity under the leadership of the CPC, especially since the 19th CPC National Congress. It shows the confidence of the Party and the government in deepening reform and strengthening the “top-level design”.

The formulation of any top-level design is based on global and domestic situations. The COVID-19 outbreak, regional conflicts, global power games, and other complex variable factors have all increased uncertainties. Hopefully, a series of new development concepts and strategies devised by the authorities, such as supply-side structural reform and the “dual circulation”, will help China to achieve the 14th Five-Year Plan’s goals as well as the long-term development goals through 2035.

Liang Jun, a professor at Xi’an Jiaotong University, and an academic member of the Pangoal Institution

Green industries to be new economic driver

The communiqué issued after the plenary session gives a detailed guideline for China’s development, in which planning for scientific and technological development is very important.

Several problems in science and technology field must be redressed urgently. China needs to strengthen areas of weakness through independent innovation of advanced materials, chips, operating systems and software, and take advantage of its huge domestic market to boost both the domestic and global economies by developing the science and technology sector.

Some new strategies are likely to be announced during the 14th Five-Year Plan period for the development of emerging industries. And the indicators of some green sectors, such as photovoltaic power, wind power and other clean energy industries, will grow and their industrial scale expand. And the wind power, photovoltaic power and ultrahigh voltage sectors in the upstream to innovative applications of new energy vehicles in the downstream, given their advantages, are expected to replace the real estate sector as a new engine of China’s economic development.

As the pace of COVID-19 vaccine development shows China’s relative advantages in the accelerated process of basic research when it comes to market application, it may become easier for China to use scientific and technological innovation to promote healthcare development, especially in fields such as biomedicine.

Yi Huanhuan, a researcher in internet financing, and an academic member of the Pangoal Institution

The views don’t necessarily reflect those of China Daily.

LI MIN / CHINA DAILY