Friday, 24 November 2017 Sydney
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CHINA’S FUTURE IN A FIVE YEAR PLAN::

China’s 12th Five-Year Plan suggests the global trend is towards peace, development and cooperation, and the overall international environment is beneficial to China’s peaceful development. It’s an encouraging synopsis, but it’s the social and environmental angle of this foundation plan that is raising eyebrows around the world. Sophie Weisz reports.

China’s economy  is structured around five-year plans. The latest development plan addresses rising inequality, encourages sustainable growth, aims to improve social infrastructure and 

rebalance the country’s economy.

The current five-year plan (covering the years 2011 to 2015) 

China’s five-year plan aims to transform the world’s second-largest economy from an investment-driven dynamo into a global powerhouse with a steadier and more stable trajectory. The plan affects domestic and foreign companies in all industries.

The plan characterises a handful of industries as emerging battlegrounds where countries will be competing for technological leadership during the next wave of development. These industries, including new energy sources and biotechnology, are distinguished by their high profit growth potential and moderate state oversight. In these areas, the government has dedicated itself to incubating national and global champions by helping them gain leading technologies and expanding their commercial capabilities.

For China, this 12th Five-Year Plan period is crucial to building a moderately prosperous society in all respects, and critical to deepening the reform and opening up and accelerating the transformation of the economic growth pattern.

In the coming years, the country is believed by China’s parliament to be in an important periodof strategic opportunities for development. 

In addition to the 12th Five-Year Plan, the theme of scientific development and the transformation of the economic growth pattern are also evident in the freshly approved government work report. 

Improved livelihood is  instrumental in China’s drive to expand domestic consumption, which will have positive effects on boosting healthy, coordinated and sustainable economic and social development. 

The government had initiated the framework for reforming education, health care, social security and housing sectors in the 11th Five-Year Plan period (2006-2010), and it should seize the opportunities now to improve the framework. 

For instance, the government should increase the supply of affordable housing to meet the needs of low-income people. 

The 12th Five-Year Plan noted that there still exists the global trend toward peace, development and cooperation, and the overall international environment is beneficial to China’s peaceful development. 

In the meantime, the international environment is getting more complicated as the impact of global financial crisis lingers, the world’s economic growth remains sluggish, global competition intensifies, and protectionism surges, according to the plan.


Market economy with socialism characteristics?

“No other market shares China’s special characteristics,” says Dr Mona Chung, a Deakin University lecturer and principal of Cross Culture International.

“For a start, it is a market economy with socialism characteristics. Try to explain what that is! Even the Chinese government has had to come up with newly invented terms. 

“China has five-year plans. Resources are allocated according to these plans. That is the core of a centrally planned economy. A pure market economy is driven by consumers’ demands and needs. A pure market economy should not be interfered by the government constantly. We cannot give China the ‘free market economy’ status without using the inverted commas,” says Dr Chung, who is an expert in China-Australia business relations and cross-cultural communication.

“However, within the central planning, the operation of the market is somewhat permitted by the government to serve as a market economy where there is plenty of government interference. Therefore to understand how to operate within such environment for companies who are only familiar with the market economy like Australia, it is difficult to comprehend the role of the Chinese government. Whether they encourage or discourage the development of a specific industry depends on the allocation of resources. Priority funding applies for industries requiring urgent development. It is when the policy promotes ‘going out’ as a new investment policy that much of SOE money comes into Australia buying mines, farms, real estate, etc. On top of that, when spending the SOE money, it is different from spending private funds because return on investment is not a top priory. To say ‘people are people’ shows a lack of understanding of China and Chinese.“


 

Highlights of the 12th Five-Year Plan

Agriculture 
• Annual grain production capacity to be no less than 540 million tons. 

• Farmland reserves to be no less than 1.818 billion mu. 

Environment & clean energy 
• Non-fossil fuel to account for 11.4 per cent of primary energy consumption. 
• Water consumption per unit of value-added industrial output to be cut by 30 per cent. 
• Energy consumption per unit of GDP to be cut by 16 per cent. 
• Carbon dioxide emission per unit of GDP to be cut by 17 per cent. 
• Forest coverage rate to rise to 21.66 per cent and forest stock to increase by 600 million cubic meters. 

Economic restructuring 
• Rise in domestic consumption. 
• Breakthrough in emerging strategic industries. 
• Service sector value-added output to account for 47 per cent of GDP, up 4 percentage points. 
• Urbanisation rate to reach 51.5 per cent, up 4 percentage points. 

Economic targets 
• GDP to grow by 7 per cent annuallyon average. 
• More than 45 million jobs to be created in urban areas. 
• Urban registered unemployment to be kept no higher than five per cent; 
• Prices to be kept generally stable. 

Innovation 
• Expenditure on research and development to account for 2.2 per cent GDP. 
• Every 10,000 people to have 3.3 patents. 

Livelihood 
• Population to be no larger than 1.39 billion. 
• Life span per person to increase by one year. 
• Pension schemes to cover all rural residents and 357 million urban residents. 
• Construction and renovation of 36 million apartments for low-income families. 
• Minimum wage standard to increase by no less than 13 per cent on average each year.

Social management 
• Improved public service for both urban and rural residents. 
• Improved democracy and legal system. 
• Better social management system for greater social harmony. 
• More than 10 per cent of all residents will be registered as community volunteers. 

 

Brought by Australia China Trade & Investment