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“If you wanna know what China’s gonna do, best pay attention to the shi san wu (13-5), the shi san wu, and the shi san wu!” The jingle is from a catchy video released last week by Xinhua, the Chinese state-run news agency, to highlight to the outer world significance of China’s Thirteenth Five-year Plan. Global interest in the Communist Party of China’s (CCP) days-long deliberations suggests plenty were paying attention.
Top-down planning may be out of vogue in developed world, but it is still deemed relevant, nay essential, for a country the size and complexity of China. The next five-year plan, finalized on October 29, runs from 2016 to 2020. Details will emerge in March next year, when the Chinese Congress will stamp its approval. Right now, there is just a communiqué for commentators to work with. But the wording is revealing.
It’s difficult to put a narrative, but there is a phrase that may capture the essence of 13-5: “boosting growth”. Authorities have set out to double urban and rural incomes by 2020 over 2010 level. To do that, China would need to grow at 6.5 percent or more in next five years, or what the Chinese are referring as “medium-high economic growth.” The plan seems to cover main elements of GDP growth – increasing productivity, investments, and labour force.
Chinese planners are concerned about the country’s ageing population. According to Xinhua, working age population had peaked in 2012 at 940 million. Some 349 million Chinese – about 25.6 percent of China’s population – was above 60 years of age in 2014. One of the levers China has used in the fresh plan is to replace the decades-old one-child policy with a two-child policy.
Due to economic pressures and social changes (rising education, delayed marriages, etc.), there is skepticism whether it’s too little, very late for the government to do anything about population. In early 2014, the government had allowed couples to have a second child if one of the parents was himself or herself an only child. Till May this year, according to Xinhua, only 13 percent of the 11 million eligible couples had made the application to the government.
China not only needs to beef up its working-age population, but also get its citizens to spend more, in order for consumption to grow year-on-year at healthy pace. The communiqué mentioned that the state will “extend old-age insurance to its full population and implement the critical illness insurance system in full scale.” That not only takes care of post-retirement “life support” concern, but also puts more money in folks’ pockets. The state has also pledged high-school tuition fee waivers and subsidies for the poor.
Productivity improvements will be targeted via innovation. In search of economic sophistication, the party-state is going to “encourage a system that nurtures innovation and sees better allocation of resources including labour, capital, land, technology and management.” There is emphasis on “mass entrepreneurship”, especially in technology areas such as sharing economy, big data, and integration of traditional industries with the Internet.
The planners are mindful that the whole rebalancing of the economy – from an export-dependent, investment-heavy machine to one that derives impetus from domestic consumption – will be premised on balanced and sustainable economic development.
The communiqué relayed that CPC is targeting to lift “all rural people out of the poverty by 2020.” So, it seems that the pivot for infrastructure investments would be towards backward regions. President Xi Jinping’s “Belt and Road Initiative” – which aims to bring massive development and connectivity to poor regions – also figured in the communiqué. China is going to deploy “institutional arrangements” for people to have “an elevated sense of being well off”, which could mean different forms of state social support.
Detailed plan would make for a better picture – for that, we have to wait for a few months. But hard-charging Uncle Xi and his team have that plan. Execution will determine fate of many in China and abroad.
“As the plan goes from high to low, the government’s experience continues to grow. They have to work hard and deliberate, because a billion lives are all at stake!” goes the jingle. Couldn’t agree more!

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