China looking to surpass US economy within next decade
Communist Party officials gather in Beijing this week to map out the next phase of economic development, just days before one of the most contentious U.S. elections in history will produce a president resistant to China’s ascent no matter who wins.
The country’s 14th five-year plan is expected to center around technological innovation, economic self-reliance and a cleaner environment. Officials will also set goals for the next 15 years as President Xi Jinping seeks to deliver on his vow for national rejuvenation by gaining the global lead in technology and other strategic industries.
If China’s economy, which is already recovering swiftly from the coronavirus shock, can stick to the growth trajectory of recent years, it’ll surpass the U.S. within the next decade. The prospect of deeper frictions with the U.S. underpins Xi’s strategy to accelerate plans to shield China from swings in the world economy.
“It reflects China’s realist reassessment of the current global climate,” said Fred Hu, the founder of Primavera Capital Ltd., a private-equity fund based in Beijing. “Self-reliance is about developing certain domestic capabilities through investments in R&D and innovation, a necessary and prudent response to external uncertainties.”
“However, it doesn’t mean China will repudiate its longstanding ‘open door’ policy and turn inward,” Hu added.
Xi and other officials have recently insisted the economy will further open its doors to foreign capital and competition, reflecting concerns about how the world will perceive the upcoming plans. In a speech in Shenzhen this month, Xi vowed to drive technological innovation, but softened that message by making it clear he wants a “new open economic system.”
That desire to avoid having the new plans become the latest lightning rod in the nation’s deteriorating relations with the U.S. and other trading rivals may mean the language around them is toned down. A previous strategy dubbed “Made in China 2025” went dark after it inflamed trade hawks in the Trump administration and spurred unease in Europe and other economies at risk of losing out to increased competition.
There’s already growing support to restrict China’s access to strategic technologies. President Donald Trump’s aggressive stance toward China now has bipartisan backing and Chinese officials worry Joe Biden may be even more effective by bringing allies together to curb its development.
Unlike its peers, China’s economy is the only major one in the world forecast to grow this year after authorities aggressively contained the coronavirus.
Still, the number of countries that consider Chinese technology companies as national security threats is growing. Some are banding together to shift import dependency away from China as criticism grows over its domestic policies. Global companies are also assessing their supply chains due to reports of forced labor and China’s treatment of Uighurs in Xinjiang and its policies toward Hong Kong.