China unveiled the first glimpses of its economic plans for the next five years, promising to build the nation into a technological powerhouse as it emphasized quality growth over speed.
Initial details released by the Communist Party’s Central Committee Thursday stressed the need for sustainable growth and also pledged to develop a robust domestic market. The communique released by state media following a four-day closed-door meeting didn’t specify the pace of growth policy makers would target.
The statement elevated China’s self-reliance in technology into a national strategic pillar, a move signaled by officials from President Xi Jinping down in the lead up to the meeting. Central to that endeavor is self-reliance in chips, the building blocks for innovations from artificial intelligence to fifth-generation networking and autonomous vehicles.
Beijing’s efforts are gaining urgency as the U.S. seeks to contain the rise of its geopolitical rival. The U.S. has pressured allies to shun equipment from Huawei Technologies Co., barred dozens of China’s largest tech companies from buying American parts, and even slapped bans on ByteDance Ltd.’s TikTok and Tencent Holdings Ltd.’s WeChat.
Unlike the last five-year plan, which sought to achieve “medium-to-high growth” in order to build a “moderately prosperous society,” this plenum had been expected to focus on the quality rather than the pace of growth. In Thursday’s statement, officials pledged to stick to a strategy of boosting domestic demand and opening up the economy over the next five years.
Even though the plan doesn’t mention a specific rate of growth for gross domestic product, analysts said the government remains ambitious in its outlook.
“The leadership still expects the size of the economy, household income as well as GDP per capita to reach a ‘new milestone’ by 2035,” said Raymond Yeung, chief greater China economist at Australia and New Zealand Banking Group. “China did not abandon GDP targeting, it’s just expressed in a more subtle way.”
While the strategy on “dual circulation” was mentioned twice in the communique, there wasn’t any specific explanation or details of what it entails. The nation needs to “smooth the domestic circulation, facilitate dual circulation at home and abroad, comprehensively promote consumption and expand room for investment,” according to the statement.
–With assistance from Edwin Chan, Alfred Cang, Dan Murtaugh and Jing Li.
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