By Azhar Sukri /Al Jazeera/ – After four days of private meetings among the top echelons of China’s ruling elite, Beijing has outlined its economic and social goals for the next five years.
The Chinese Communist Party’s 14th five-year plan, covering 2021-2025, is being laid out while China faces some conflicting priorities.
These include maintaining a fast-enough economic growth rate to generate jobs and opportunities for the majority without worsening the already wide income inequality gap and protecting the environment. Another is having to engage with the world economy while the United States seems determined to curb its global influence.
Beijing’s communique released late on Thursday did not go into the fine details of its plans. Those will be fleshed out at the National People’s Congress – the equivalent of an annual sitting of parliament – in March.
But it did outline some broad goals, including achieving what it described as “healthy” economic development, becoming a “moderately developed” economy by 2035 and remaining committed to the “peaceful development” of ties with Taiwan, which it considers a rebel province and part of Chinese territory. And it is doing all this while recovering from the coronavirus pandemic which began in China late last year.
More on these topics below, but first, here are five questions about China’s five-year plans.
Firstly, why does China plan its economy out in five-year blocks?
China began rolling these out in 1953, four years after Mao Zedong’s Communist revolution. Most Communist countries, including the former Soviet Union, planned their economies this way. But China carried on doing so even after the collapse of the USSR and as it transitioned from a purely socialist economy to a more capitalist model.
And while China has embraced market forces in many aspects of its economy, it retains a much more centralised system than the West.
“China’s five-year plans are not designed to attract votes or score political points as is done in the West by some politicians. They are aimed at realizing the people’s aspirations for a better life,” the state news agency Xinhua said in an article published this week in the Communist Party-controlled Global Times newspaper.
So how does the five-year planning system work?
According to the same article, “The decision-making process involves input from thousands of think tanks, government agencies, universities, prominent scholars and professionals.”
The government received more than one million suggestions for the 14th Five-Year Plan from Chinese netizens during a two-week period in August, the paper said.
Those proposals were discussed during the plenary session of the Communist Party’s Central Committee this week, a series of meetings involving about 200 of its leaders including President Xi Jinping.
What have some of China’s previous five-year plans been about?
The first five-year plan for 1953-1957 was all about transitioning from an agrarian economy to an industrialised one, albeit with socialist underpinnings and modelled on the Soviet Union. Mao’s newly formed government poured money into boosting coal and steel production.
Mao doubled down on this industrialisation strategy in the second five-year plan, which ran from 1958 to 1962, also called “The Great Leap Forward”.
From the late 1970s, under Deng Xiaoping, China had started embracing market forces and began opening itself up to the outside world by investing in export industries, a period covered by the fifth, sixth and seventh plans.
The current, 13th plan period from 2016 to 2020, has been about making China a “moderately prosperous society”, reducing its reliance on exports for economic growth and ensuring that growth is sustainable, both socially and environmentally.
Have these plans worked?
Overall, yes, they have. But not always.
In fact, The Great Leap Forward was a catastrophe. Mao’s rush to industrialise left China’s farms severely under-resourced, resulting in famines affecting millions of its people.
But from the late 1970s, China’s growth and development have been spectacular. Today, it is the world’s second-biggest economy after the US.
Gross domestic product(GDP) per capita has grown from the equivalent of $89.5 in 1960 to $10,262 in 2019, according to World Bank data based on current exchange rates, a 115-fold increase. Meanwhile, the proportion of Chinese people living below the equivalent of $1.90 per day fell from 66.3 percent in 1990 to 0.5 percent in 2016, also according to the World Bank.
But there have also been some unintended consequences to that rapid growth.
One has been a yawning gap between rich and poor, a situation made worse by the coronavirus pandemic.
Meanwhile, the emphasis on growth at all costs and rapid industrialisation for much of the 1990s and 2000s has taken a toll on China’s air and water, and as a result, people’s health.
And it has resulted in large trade surpluses with the rest of the world, making countries that once supported China’s entry into the global economy now wary of it.
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