Mon, Jan 03, 2011 - Page 3 News List

INTERVIEW: China’s Five-Year Plan veering toward unification

By Tzou Jiing-wen  /  Liberty Times Staff Reporter

Finally, the Five-Year Plan has five fixed goals: steady and faster economic development, strategic adjustments to the economy to encourage greater growth, a more widespread and faster increase in the incomes of rural and urban residents, a noticeable increase in infrastructure and increased reform and opening up.

TT: In concrete terms, what does China’s strategy consist of?

Chang: Although 10 major strategies are listed among the -recommendations and although there are accompanying action plans or concrete measures to each strategy, there is no time factor, which makes it impossible to detect a strategic path. Using abductive reasoning, I have found four important strategic paths leading up to the 12th Five-Year Plan. The key path, or the key strategic path, that we should pay attention to is the path that has been followed for the longest time. This path is key to controlling the timeline for implementing the overall strategy and that is why it is called the key strategic path.

This Five-Year Plan began with the Chinese Communist Party’s policy to speed up reform and perfect the socialist market economy.

The eight main reforms were, first, the creation of different kinds of economic ownership, legally regulating equality in the use of production factors, and fair participation in market competition; second, to deepen the reform of industrial monopolies; third, to perfect various management systems for state-owned assets and create a healthy operational budget and benefit distribution system for state-owned assets; fourth, to support and lead the development of the non-public economy and encouraging non--public enterprises to participate in the reform of state-owned enterprises; fifth, to create healthy land, capital, labor, technology and information factor markets; sixth, to deepen the reform of prices, factors of production and markets for strategic resources — water, energy, mining products, land; seventh, to smooth out the prices for coal, electricity, petroleum, air, water, mining resources; and eighth, to perfect the mechanisms for setting prices for important products, services and factors of production.

When evaluating these reforms, at least a year to two years is needed before we begin to see results.

However, two very important reforms are missing here, namely, the reform of the household registration system and the reform of the market for agricultural land. Due to the progress of the above-mentioned reforms, it is expected that the strategic plan to establish a mechanism aimed at expanding consumption will get under way around next year some time.

It is expected to bring about an increase in the first distribution of national income among urban and rural residents so they will get some pocket money to spend. That can be followed by the strategic strengthening of social construction and establishment of a healthy system for basic public services. The goal is to use government transfer payments to increase the income of urban and rural residents through a second distribution [of national income]. With their increased income, they can increase their consumption without having to worry about the consequences, such as retirement, health insurance and other such issues. There will also be basic guarantees for housing and their children’s education. Through these measures, they will create good consumption prospects, although this goal will probably not be realized until the second half of 2013 some time.

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