Leaders of the Communist Party of China are meeting in Beijing to discuss an economic blueprint that will set the direction and pace for the world’s second largest economy over the next five years.
With China in a period of transformation, the new five-year plan, the 130th of its kind, has been gaining increased attention from observers both at home and abroad.
We now take a look at what U.S. experts say about the China’s achievements in the past five years as well as the focus of the next five-year plan.
Despite twists and turns in the world economy, China has been making steady progress in its development over the past five years.
China is expected to achieve an average GDP growth of 7.8 percent from 2011 to 2015, much higher than the global average rate of 2.5 percent.
It has become the second economy valuing more than 10 trillion U.S. dollars and contributes to more than one quarter of global economic growth.
“They have taken China from an economy that was insignificant in a global context to the No. 2 economy in the world. That, if we want to talk about achievements of the 10th, 11th and the 12th five-year plan, that is the most significant achievement in China. We have taken hundreds of millions of people out of poverty; we created a solid middle class. We put China back on the world’ s stage in terms of culture, politics and economy where it has traditionally been throughout the history.”
With the gradual expansion of the middle class, domestic consumption has contributed greatly to the economy.
“If you look at various sectors of GDP growth, whether or not the statistics are able to capture the service sector as fully as I see that sector growing. I think that is an important sector. Chinese policy has changed the economic model, so that it is not FDI driven, it is not export-driven, but domestic consumption driven.”
“When I look at, first, the domestic consumption, I think perhaps the greatest achievement of the 12th 5-year plan was the skyrocketing percentages of consumer spending over the last 5 years. China has become the fastest growing consumer market in the world today. Chinese consumers are buying everything from luxury goods, to home products, personal care, health care. It is largely due to the fact that there has been robust employment in the middle class. So the middle class grow in China, domestic consumption is growing along with it. So we have seen a real move towards a healthy replacement for manufacturing in GDP within domestic consumption.”
Over the past five years, China has been steadily pursuing reform, targeting various sectors including administrative system, taxation, finance and state enterprises.
“I think China has stayed a steady course of deepening reform, I see that in many sectors, could be sped up in certain sectors, I think that would be a good thing, and I think we will see that in the next five-year-plan. The bilateral investment treaty is under negotiation. And I understand, following president Xi’s meeting with president Obama, there has been progress that has been made, but I certainly do not see a reversion back to pre-reform. In face I actually think part of President Xi Jinping’s legacy looking out many years later is that economic reform is at the top of his agenda and that he will be thought of as having carried forward economic reform.”
Looking into the next five years, many believe that China will largely maintain its current policies, while at the same time encourage more innovation and high value-added manufacturing.
“In this next five-year plan, I see a focus on high quality innovative materials as opposed to just turning out widgets. So high value-add is where you are going to see the focus.”
“If we had to pick out a word that I see really standing out in the next five years is innovation. China needs to become an innovation economy, and that will address everything from manufacturing to health care, technology, exports, and quality of life, environmental. To thrive for the next 10 to 20 years, China needs to innovate for itself and for the world.”