Will China’s next 5-year plan rewrite its infrastructure playbook?
While the old ‘megaproject’ model was effective, upcoming blueprint could provide outline for an updated, tech-driven outlook
As China drafts its 15th five-year plan – the next entry in a line of expansive blueprints that have set the tone for the country’s development over more than seven decades – we examine how these documents inform and reflect high-level policy priorities, what to expect in the coming iteration and how infrastructure spending and investment could evolve to meet the demands of a new era.
The highly publicised moment was underpinned by decades of rapid expansion that helped China’s economy grow into the world’s second largest. One of the most notable actions taken during that time was the roll-out of a 4-trillion-yuan (US$586 billion circa 2009) stimulus package, which leveraged massive public works projects and other spending to help China escape the worst of the global financial crisis in 2009 and 2010.
While most projects under that model worked to link the country’s massive population and overcome widespread geographic hurdles to development, some ultimately added debt to local governments’ balance sheets, a persistent source of financial pressure that still weighs down growth potential in the regions with the heaviest burdens.
Despite these concerns, officials and government advisers still see considerable value in these investments. Some economists remain bullish on the scale of infrastructure spending over the next half-decade, noting projects are likely to become more tech-driven and people-focused.
In an editorial published as part of a series running from late September through early October – timed as a prelude to the fourth plenum of the ruling Communist Party’s Central Committee, a meeting widely expected to produce an outline of the next five-year plan – party newspaper People’s Daily wrote there are “significant opportunities” in infrastructure development, referring to traditional construction as well as newer means of enhancing connectivity.
“China’s vast territory and ongoing regional coordinated development create substantial demand for infrastructure. The density of railways and highways in the central and western regions still lags far behind that of the eastern coastal areas, indicating that the construction and upgrading of traditional infrastructure can continue to generate long-term comprehensive economic and social benefits.”