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Macroscope | China’s ‘two sessions’: ambitious but practical goals in five-year plan target high-quality growth
- Innovation and technological development are the foremost drivers of productivity growth and thus are the top priority in the new five-year plan
- Investment in frontier fields, R&D, new infrastructure, green manufacturing and more form the core of China’s plans for long-term growth
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In the government work report delivered by Premier Li Keqiang to the National People’s Congress earlier this month, the 2021 growth target was set at above 6 per cent year on year. This target seems conservative and significantly below the consensus forecasts around 8.7 per cent by local economists.
It reflects the leadership’s commitment to achieve sustainable and healthy economic growth in the long run while shifting from quantity-driven growth to a quality-driven growth model in the coming decade.
During the annual “two sessions” legislative meeting, the 14th five-year plan draft outline and long-term development goals for 2035 were submitted to representatives for review. In these plans, the long-term development road map was laid out in more detail, which helps us better understand the essence of the high-quality growth.
First, sustainable growth in labour productivity is at the core of high-quality growth. In the government work report, the goal was set to keep higher growth in labour productivity than that of GDP during the period covered by the 14th five-year plan.
Against the backdrop of a shrinking working-age population and declining benefits from investment, productivity growth should play a key role in supporting China’s economic growth. Therefore, improvements in productivity will be the starting point for us to understand China’s economic policy in the next decade.
Innovation and technological development are the foremost drivers of productivity growth. As a result, this topic was the top priority in the new five-year plan outline. Seven frontier fields were listed as national projects – artificial intelligence, quantum information, integrated circuits, brain science, genetic and biological technologies, clinical medicine and health, and exploration of outer space, underground, deep seas and polar regions.
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