Chinese leadership meets to set policy direction for next 5 years

Chinese leadership meets to set policy direction for next 5 years

Priorities are expected to include boosting self-sufficiency and domestic demand

China’s leadership will start discussions today to set the country’s long-term priorities, with Beijing expected to focus on boosting technological self-sufficiency and domestic demand.

The Fifth Plenum, a meeting of the Communist party’s leadership, will run until Thursday. It will conduct the country’s most important goal-setting exercise, drafting the next Five-Year Plan, against the backdrop of a worsening global economy and US sanctions. The plenum will also discuss a broad plan for the next 15 years, with goals that are likely to endure for at least the rest of 67-year-old President Xi Jinping’s rule.

The process to draft a plan typically reveals the biggest worries and priorities for the Chinese leadership. This year’s meeting comes as the deadline for meeting the previous overarching goal of achieving a “moderately prosperous society”, is due to expire in 2021, the centenary of the founding of the Chinese Communist party.

Beijing has hinted it would broaden out its focus on economic growth to include targets for environmental protection, innovation and self-sufficient development — such as in food, energy, and in chips.

Mr Xi is also expected to use the exercise to consolidate his influence over the party and the party’s influence over governance, said Holly Snape, a fellow in Chinese politics at the University of Glasgow. “It’s useful to understand these broad goals in the context of an expression Xi seems fond of: the party, government, military, people, education, east, west, south, north, and centre — the party leads everything,” she said.

In recent months, Mr Xi has reiterated the idea of developing a “dual circulation” economy in which China will develop domestic demand and self-sufficiency as the rest of the world remains stalled by coronavirus.

China has for decades valued technological self-sufficiency, but “there’s an important shift coming in the next five years”, said Samm Sacks, cyber security policy fellow at New America, a Washington-based think-tank. US sanctions on Huawei, the technology group, have shown Beijing how easily a national champion can be brought down by a blockade on US technology. “The government is now looking to keep more of the advances of its homegrown tech sector inside China, especially R&D and expertise gleaned from foreign companies,” added Ms Sacks.

Beijing has set an average annual gross domestic product growth-rate target in every Five-Year Plan since 1986. But this year, as the economy was pummeled by the Covid-19 pandemic, China for the first time did not define a target. Economists at Macquarie Group expect that the goal will be lowered from the 6.5 per cent set in the current plan to 5 per cent in the next. They also believe the goal to be given less prominence.

The Five-Year Plan will also explain how the government will meet Mr Xi’s target of zero net carbon emissions by 2060.

After this week’s Central Committee meeting closes, a brief outline of the Five-Year Plan will be released. But the plan itself will not be ratified and is likely not to be made public until the next meeting of the rubber-stamp legislature, usually in March the following year.

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