Leaders of the Communist Party of China, or CPC, will gather from October 26th to 29th in Beijing to discuss the development plan for the next five years.
The five-year plan, China’s 13th, is considered strategically important as it is crucial to China’s goal of realizing “a moderately prosperous society in all respects by the centennial anniversary of the founding of the CPC in 2021.”
The upcoming fifth plenary session of the 18th CPC Central Committee has attracted global attention, as the next five-year-plan will be discussed at the meeting.
China is also aiming to double its 2010 GDP and people’s income by 2020, according to its 12th five-year plan, 2011-2015.
Therefore, the quality of the next five-year-plan will, to a large extent, decide whether these grand goals are achievable.
Sean Miner, a researcher at the Petersen Institute for International Economics, says China is on track to meet the goal.
“Indeed, this is a very ambitious goal to double, per capita, GDP within a ten-year period. Actually, China is on track to perform that out. In 2010 their GDP per capita was around 5 thousand dollars, and already in 2014 they had reached 7500 dollars per person. They would only need a growth rate in wages of around 6 to 7 percent for the next four or five years to reach that goal. Mind you over the past 10 years, wages have grown at 10 percent per year. so it’s a feasible goal.”
According to the National Bureau of Statistics, in the 2011-2014 period, China’s economy expanded by an annual rate of 8 percent, slower than growth of about 10 percent in the previous three decades.
“China’s growth rate is slowing down, but in relative terms, it’s still growing much faster than most industrial countries and now it has to deal with slower growth in emerging markets –and this is affecting China in several ways, especially in exports. So move to more consumption is ever more important.”
Miner also shared his view on China’s next five-year-plan.
“So I think there are several areas where I think China should focus on in terms of their next 5 year plan. And one of them is to continue opening the Capital Account–and you can see this in areas where China opened last year the Shanghai Hong Kong sky connect, linking the stock exchanges of Shanghai and Hong Kong – they’ve already announced more investment by foreign investors in China in the equity markets, through the R3Q program – a program to allow Renmenbi denominated assets to be invested in China’s markets . Also should look for ways for small and medium sized enterprises to find sources of loans.”
Miner said the 13th five-year-plan should also focus on enterprise reform, with more transparency and getting away from more preferential treatment for state owned enterprises.