China wants to make its financial markets more solid with the 14th Five-Year Plan and bring the regional governments and the economy down from high debt levels. It also aims to reduce the risk of bubbles. Can this be achieved without slowing down the momentum on the markets?
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Nuclear power is considered an important component of the energy concept in the new five-year plan – it is supposed to enable growth without emissions. With 20 new reactors by 2035, the expansion is now proceeding more rapidly. However, it is still well below the original, much more ambitious plans.
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China wants to become carbon neutral by 2060 and reduce its emissions from 2030 at the latest. The 14th Five-Year Plan must contain the first concrete measures to achieve this. The announced draft gives the topic a lot of space, but details are available only in the plan itself.
By Christiane Kuehl
In China, too, there is hardly a political topic as emotionally discussed as the high housing and rental prices. The new Five-Year Plan addresses the issue and promises more affordable housing. Despite rapidly rising prices, the burst of a bubble is considered unlikely. Beijing is too worried that social unrest could occur in such a case.
By Redaktion Table
Many older Chinese feel left behind by the country's rapid digitization. China's government wants to close the "digital divide" between young and older people by 2022. This means more social integration, but also more consumption – and thus follows the logic of the 14th Five-Year Plan. For companies, at any rate, the target group of senior citizens is a long underestimated growth market.
By Frank Sieren
In its 14th Five-Year Plan, Beijing clarifies: Foreign actions regarding Hong Kong and Taiwan are not desired. Brussels expects protectionist guidelines but also recognizes fields for possible cooperation. A progress report by EU foreign affairs envoy Josep Borrell on relations with China is expected for the EU Council meeting at the end of this month.
By Amelie Richter
With its 14th Five-Year Plan, China aims for more independence from foreign countries and at the same time attempts to open its markets more; it wants to invest more and at the same time save more. What sounds contradictory has a method and brings opportunities for Germany and Europe.
By Frank Sieren
This year's National People's Congress begins next Friday in Beijing. The focus will be on adopting the guidelines for the 14th Five-Year Plan. The main issues are the dual-circulation strategy, the goals for China's innovative capacity and technological independence, and the achievement of social targets and now also increasingly of climate goals. China.Table will analyze topics in concrete terms by Friday.
By Nico Beckert
The People's Congress of the CP of China starts on March 5. Dual circulation is one of the central goals of the next five-year plan. But scientists say: The Chinese do not earn enough money. If Xi's plan is to succeed, the middle class, in particular, must grow able for more consumption.
By Nico Beckert
The National People's Congress in China has approved the 14th Five-Year Plan of the People's Republic. The China.Table editorial team explains what the plan is about and its key targets.
Five-Year Plans in China can be simply explained: In communist countries, a Five-Year Plan is an instrument used to plan the national economic development. It specifies what sectors are particularly important and what goals should be pursued. The Five-Year Plan in China is decided by the National People's Congress, which can be described as the country's parliament. The Chinese Communist Party (CCP) governs the People's Republic of China. Since opposition parties are not allowed to be elected to parliament, only decisions made by the CCP are approved by the National People's Congress.
When the People’s Republic of China was founded on October 1, 1949, the country was in ruins. Invasions and civil wars had driven the population to the abyss. Mao Zedong worked mercilessly to rebuild the nation. After re-establishing a viable economic base, the First Five-Year Plan was put into effect in 1953. Aims of China's First Five-Year Plan were to clock through the transformation from a peasant state to an industrial nation. Yet, Mao Zedong himself was not a great friend of Five-Year Plans. He criticized the bureaucracy and feared that apparatchiks, like the great landowners he had expropriated, would turn into the new ruling class.
Part of the Second Five-Year Plan was the Great Leap Forward campaign from 1958 to 1961. Agriculture was centralized and private farming was banned. A three-year famine that cost the lives of 15 to 55 million Chinese followed suit. Even cases of cannibalism were documented.
Since then, China has undergone profound change. While in 1978, 770 million people in rural China lived in poverty, only 5.1 million did so in 2019. According to the China Internet Information Center, China’s poverty rate fell from 97.5 percent to 0.6 percent.
Despite the enormous improvement of living standards, China is still recognized as a developing country by numerous organizations. This can mainly be explained by looking at the gross domestic product per capita. According to the International Monetary Fund (IMF), China’s GDP per capita was $10,522 in 2019. The global average is around 1,000 dollars higher. The People's Republic of China thus ranks 69th place.
Regardless of the humbling statistics, the focus of China’s Five-Year Plans has shifted. Fighting hunger is no longer a top priority for China's leaders. In 2016, China implemented the 13th Five-Year Plan. It focused primarily on doubling economic output by 2020, compared to the output of 2010. Other priorities of the 13th Five-Year Plan were innovation-driven development, general environmental improvements, as well as the development of environmental technology industries, the expansion of the service sector as well as increased spending on research. Innovations were to boost the national economy.
China's 14th Five-Year Plan was drafted in October/ November 2020 and covers the years 2021-2025. While innovations remain at the core, the plan partly shifts focus from quantitative economic growth towards domestic economy and social development. China's 14th Five-Year Plan is designed to consolidate the People's Republic's role as one of the leading science and technology nations and becoming a global manufacturing superpower. The 14th Five-Year Plan clearly states this. Innovations in the fields of artificial intelligence, quantum technology, information technology, brain research, biotechnology, digitization, and aerospace should serve the rise to a superpower. Climate targets are anchored for the first time.
The U.S.-China trade war of recent months has also resulted in China devoting itself to dual circulation in the current Five-Year Plan. The Dual Circulation policy is a centerpiece of China's 14th Five-Year Plan. It which aims to strengthen China's domestic economy and make China's foreign economy less dependent on exports.
But the trade war with the U.S. is not the sole reason for the focus of the 14th Five-Year Plan. The coronavirus pandemic has taught China that it cannot rely on global trading partners for its growth plans. If the economy of a different large nation collapsed, China would suffer as well.
Hence, the 14th Five-Year Plan calls for the stimulation of domestic demand and the strengthening of regional trade alliances. The Dual Circulation strategy is also intended to inject new momentum into the Made in China 2025 strategy. Made in China 2025 is a policy of the 13th Five-Year Plan that aims at China becoming a leading high-tech superpower. It represents an intermediate step toward China’s goal of becoming the world's leading economy in 2049.
Addressing climate change is another cornerstone of China’s 14th Five-Year Plan. In 2021, Xi Jinping, China’s president, gave a speech at the United Nations, in which he promised to strive to peak carbon dioxide emissions before 2030. This implied that emissions are to be reduced from 2030 onwards. After all, China aims to reach climate-neutrality in 2060. Climate change and environmental issues were already part of the 13th Five-Year Plan from 2016. The 14th Five-Year Plan, however, states climate targets as official objectives.
Both the 14th Five-Year Plan from 2021 and the following plan must lay a crucial foundation for climate targets; especially so, with regards to China’s coal consumption. The 14th Five-Year Plan states that green production and lifestyles are to be promoted on a broad basis. At the same time, however, oil and gas production will be pushed forward, including also new pipelines. Whether rather vague reforms of high-emission industries such as steel, chemicals and building materials can compensate for the continued reliance on fossil resources remains questionable.
With the implementation of the 14th Five-Year Plan SASAC is likely to come under pressure. The abbreviation stands for State-Owned Assets Supervision and Administration Commission of the State Council (SASAC). SASAC is a special commission that is responsible for managing all Chinese state-owned enterprises. Currently, there are around one hundred centrally managed companies. The SASAC’s scope spans from airlines, electricity producers, mobile phone providers to oil companies and more.
State-owned enterprises play an important role in China’s Dual Circulation strategy. However, state-owned companies have become weaker in the past years. Most companies make only small returns on investment, and quite a few make losses.
For a summary of the key points and further analysis of China’s goals, see our 14th Five-Year Plan dossier at Table.Talk (German only).
Up-to-date and detailed news, analyses and viewpoints on China's 14th Five-Year Plan are available from China.Table editorial team.
