Facing pressure to pep up a cooling economy, Chinese leaders yesterday met to craft a new long-range blueprint to guide development through the end of this decade.
The Chinese Communist Party’s (CCP) five-year plan is a throwback to the era of central planning, but still plays a key role, allowing the CCP to highlight its goals and policy shifts.
Party leaders are expected to use the 2016-2020 plan to renew their commitment to a marathon effort to shift China from reliance on trade and investment to more self-sustaining growth driven by domestic consumption.
The urgency for change has increased following a deeper-than-expected decline in economic growth and this year’s boom and bust in stock prices, analysts say.
“It is probably the most difficult five-year planning in history, because the multi-layer pressure generated by transforming the economy and at the same time maintaining growth has risen sharply,” said economist Liu Yuanchun (劉源俊), director of the National Academy of Development and Strategy at Renmin University in Beijing.
Economic growth slowed to a six-year low of 6.9 percent in the latest quarter, fueling concern about a possible rise in job losses and social tension. Some analysts say official figures overstate growth and the true rate might be as low as 4 percent.
Communist leaders said they would accept growth below their official target of “about 7 percent” so long as the economy generates enough new jobs.
“We never said we would defend a certain point to the death, but instead let the economy run within a reasonable range,” Chinese Premier Li Keqiang (李克強) said at a weekend gathering of officials, according to a summary on the Cabinet’s Web site.
Bank of America and other forecasters said they expect the plan to lower the official growth target to 6.5 percent or less.
Analysts also expect the upcoming plan to increase the CCP’s focus on environmental and social goals, including raising household incomes and encouraging more use of renewable energy.
Reform advocates say the CCP needs to move faster on carrying out pledges to give entrepreneurs and market forces a bigger role. That would require cutting back the monopolies and other privileges of state companies that dominate industries from oil to banking to telecoms.
An outline for state industry reform issued last month vowed to make government companies more efficient by forcing them to face more free-market competition, while retaining the CCP’s dominance in the economy.
However, rather than reducing the party’s role, that plan stated that Beijing would “strengthen party leadership” of state companies.
Reform advocates criticized last month’s plan as inadequate, because it failed to address issues such as curtailing monopolies and access to low-cost credit, land and other resources.
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