How the coronavirus and US-China conflict are driving Beijing’s domestic focus in the new five-year plan

China has moved away from its ‘reform and opening up’ approach and turned to domestic development with a new emphasis on self-reliance, technology and quality growth

The shifting geopolitical landscape and uncertainty over domestic and international consumer demand in a post-pandemic world suggest a bumpy road ahead

3-MIN READ3-MIN

Hao Zhou currently serves as a senior economist (emerging markets) with Commerzbank.

Published: 3:30am, 4 Nov 2020Updated: 4:00am, 4 Nov 2020

As a centrally planned economy, China has followed a carefully calibrated long-term strategy and made significant breakthroughs in the global system. Therefore, its new five-year plan has attracted much attention.

The Communist Party concluded the fifth plenum of the 19th Central Committee last week and unveiled the key components of the 14th five-year plan. As the first detailed strategic road map under the new “dual circulation” strategy, it provides a policy framework to analyse the Chinese economy.

In summing up the previous five-year plan in a few keywords, “Made in China 2025” should be highlighted. This is a national strategic plan to develop the country’s manufacturing sector, issued by Premier Li Keqiang and his cabinet in May 2015. As part of its 13th five-year plan, China aimed to move away from being merely the “world’s factory” and producing cheap, low-tech goods through lower labour costs and supply chain advantages.

However, China’s aggressive, ambitious approach has drawn criticism as many saw that Beijing was targeting key technology and sectors in other countries. This has generated widespread discomfort and became a catalyst for a rise in anti-China sentiment in the US and elsewhere. To help ease such concerns, Beijing has tried to tone down its ambitions for the programme.