On October 29, the fifth plenum of the 19th Central Committee of the Communist Party of China (CPC), a keynote event on China’s political calendar in 2020, concluded after a four-day meeting in Beijing.
Held against the backdrop of a global economic recession resulting from the ongoing Covid-19 pandemic that has plagued the world for almost a year, and ever-escalating tensions between the US and China, the plenum, which serves as a platform to set China’s economic policies, is closely watched by observers as it provides essential indications of China’s overall policy objectives in the coming years.
Since the 1990s, the fifth plenary session of the CPC’s Central Committee, which is held every five years, is primarily about drafting the nation’s five-year plans. But this year, along with the country’s 14th Five-Year Plan (2021-2025), China’s leadership also released a plan outlining “long-range objectives through the year 2035.” According to the communique released on November 3, China aims to become “a basic socialist modern country” by 2035.
By then, China will make notable progress in its economic, cultural, environmental, educational and military establishment with a bigger middle class at home and improved soft power and “new competitive advantages” abroad, with total economic size and per capita income to “climb to a new big level” by 2035, said the communique. In summary, China will be a rich, green, fair, well-governed and strong economic power by 2035.
In the past months, Chinese President Xi Jinping has frequently warned that China is now challenged by “profound changes in the world unseen in a century,” and that the nation should “prepare for the worst” in the coming years. The warning was reiterated in the communique.
“As the new round of the technological and industrial revolution continues to evolve, the parity of international powers is undergoing drastic adjustments... it has led to increased instability and uncertainty,” said the communique... But the document concluded that China will continue to enjoy a “period of strategic opportunity... peace and development remain the themes of the times.”
With these challenges, the document said that China should maintain its “strategic focus,” adopt “bottom-line thinking,” keep an acute sense of the risks and opportunities ahead and take a “proactive” and “self-centered” approach in order to seek further national development.
At first glance, the launch of a long-term ambitious plan at a time of uncertainties seems to be a bold but counter-intuitive move. But Chinese experts who talked to NewsChina argued that it is the upcoming challenges that require China to plan well ahead.
“These plans are particularly important in an increasingly volatile international environment, as China needs to adopt a more adaptable and forward-looking development strategy,” Dong Yu, an expert from the China Institute for Development Planning (CIDP) at Tsinghua University in Beijing and an adviser for the new five-year plan, told NewsChina.
The 2035 blueprint is not the first long-term plan made in China’s recent history. In the fifth plenary for the 14th CPC Central Committee in 1995, the Party leadership also released a 15-year “long-range plan” aimed at transforming China’s planned economy into a market-oriented one by 2010.
“China only makes such long-term plans in times considered to be critical for China’ sdevelopment,” Professor Li Junru, former president of the Central Party School in Beijing told NewsChina. “This year’s fifth plenum was held at such a historical time as China is now at a crossroads.”
In a symposium held in late August where Xi met with economists to consult on China’s development plan, Xi said that China needed to develop mid- to long-term plans that “would allow the market to play a decisive role in the allocation of resources, while allowing the government to play a better role.”
Different to previous plans, neither the 14th Five-Year Plan nor the 2035 blueprint mentioned any specific GDP growth targets. Instead, the plans include a variety of soft targets, such as reducing the income gap, revitalizing rural communities, promoting the domestic market, fostering environmentally friendly development and improving public services.
While President Xi said in a statement addressing the plans that it is “achievable” to have China’s overall economy and GDP per capita double by 2035, analysts believe that the absence of specific GDP growth targets in the official plans marks a notable policy shift.
“While the long-term plan laid out by the fifth plenum in 1995 marked the start of China’s historic transformation from a planned-economy to a market-oriented one and its embrace of globalization, the plans released after this year’s plenum mark a strategic shift from pursuing high-speed growth to high-quality development,” Li said.
Promotion of technological innovation was particularly emphasized. According to the communique, a major objective to achieve by 2035 is to “make breakthroughs in key and core technologies and to become a top innovator in the world.” In the following years, China will achieve technological self-reliance, a strategic pillar of China’s development, and innovation will be at the core of China’s overall development policies, said the document.
Since the US started to block access to US technologies for targeted Chinese tech firms, most notably the ban on foreign chipmakersthat rely on US technology to sell microchips to tech firm Huawei, it has injected a sense of urgency into the push for homegrown innovation.
In October, Xi made a high-profile visit to Shenzhen, the southern city often referred to as “China’s Silicon Valley,” where he revealed a grant reform package which aims to build the area into China’s innovation center. On October 17, Xi presided over a politburo meeting on advancing the development of quantum science and technology.
In August, the State Council released an industrial target to increase the self-sufficiency rate for chips from one-third to 70 percent by 2025. But given the vast technological gap between China and the US in some key areas, few analysts believe that China will catch up soon, especially in the microchip industry.
“It is highly unlikely that China will be able to make substantial progress within five years,” Dong said. This is also the reason that China needs a long-term plan. “To turn China into an innovation-driven economy, China needs to maintain its strategic focus and policy consistency in relevant fields [for a long time],” Li added.
Compared to previous five-year plans, which primarily focused on economic development, both this year’s five-year plan and the 2035 blueprint highlight the importance of security issues. “[China shall] keep security in mind in all fields and in the entire process of national development, to prevent and deal with all risks threatening China’s modernization,” said the communique.
China’s leadership also pledged that the country will “build a fully modern military” by 2027 to “increase China’s capability to safeguard national sovereignty, security and development interests.” It is the first time that the Chinese leadership gave a specific year for its frequently mentioned “centennial” goal of building a modern military.
The word “security” was mentioned 22 times in the communique, even more than the 17 times “innovation” was written.
Moreover, a notable change of tone is that China’s leadership is paying attention to security issues beyond its traditional realm. Other than territorial integrity and national unity, the communique highlighted security issues covering a wide range of areas including security of energy supply, food supply, supply chains and financial infrastructure.
“In the past, the source of uncertainties and challenges China faced in advancing its economy were mainly economic, but now the risks are mainly geopolitical, as some countries have started to adopt policies of containment, blockades and blackmail against China,” said planning expert Dong Yu.
Only days prior to the fifth plenum, China released a draft amendment to the national defense law, which stipulates that the country can conduct nationwide or local defense mobilization “when China’s sovereignty, unity, territorial integrity, security and development interests are under threat.” Compared to the original law enacted in 1997, the phrase “development interests” is a new addition.
According to Xu Guangyu, a senior advisor to the China Arms Control and Disarmament Association, “development interests” refers to both domestic and overseas interests, including the China-proposed Belt and Road Initiative. Xu told the State-run Global Times that if China’s normal economic operations are intentionally contained or sabotaged by external forces, including imposing severe trade blockades, China will need to take countermeasures. But Xu said China’s defense mobilization will be on a reciprocal basis, and China will counter only when the opponent adopts war-like measures.
So far, both the 2021-2025 Five-Year Plan and the 2035 blueprint are in the draft phase. The plans will be submitted to the National People’s Congress (NPC) and more detailed versions are expected to be approved and released in early 2021 during the annual NPC legislative session.
Released on the eve of the US presidential election, analysts believe that China’s new development plans send a clear message of China’s political will and confidence to advance its development agenda, despite the geopolitical challenges posed by Washington.
“China cannot decide who the next president of the US will be, nor whether President -elect Joe Biden will adopt a friendlier policy,” said a commentary published by Hong Kong-based media hk01.com. “What Beijing needs to do is to prepare for the worst.”
In a commentary published in the South China Morning Post, titled “Beyond propaganda: China’s 2035 vision assumes that it will overtake US as the world’s No.1 economy” Zhou Xin, the paper’s political economic editor, said that the 2035 plan “reflects fresh confidence” in China’s leadership that China is capable of dealing with any challenges.
“The trade war started by the Trump administration was perceived as a major threat, but it has had little real impact on Chinese trade. And the coronavirus outbreak was initially seen as posing a threat to China’s growth, but the blip proved short-lived,” said Zhou. “Beijing now views the trend of continuous growth with absolute certainty,” he added.
According to Hu Xijin, the outspoken chief editor of the Global Times, China should adopt a self-centered approach regarding the US-China rivalry.
“The fundamental approach for China to tackle the geopolitical challenges posed by the US is to strengthen itself,” wrote Hu in a commentary published in the Global Times on November 8.
“When China develops itself into a strong and formidable existence that the US can neither disrupt nor destabilize, it will make the US realize that cooperating with China is the best way to serve its own national interests,” Hu added.
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