China's plans have always been ambitious, especially in terms of growth rates. But of course, as the world's second-largest economy, quality aspects have been on the rise already long before the latest "Two Sessions" of the People's congress. China's economy is in transition, and it is clearly becoming harder to improve "one dimensional". While in recent history, plainly "horsepower" of the economy also reflected in the general improvement of quality of life and poverty reduction, now efficiency and resilience come more into play. Revealing the draft of the 14th Five Year Plan, it also becomes clear that China will deal with long-term structural issues, starting from overaged demography, socially unsettling topics to further economic reforms and strengthening of domestic innovation. The numeric targets of what has to be achieved by 2026 have become far less assertive than in the previous year, except those which directly measure the quality of life and successes in e.g. the reduction of Carbon-dioxide emissions. A compilation of some of these targets by Merics you find by clicking here.
The year of pandemic, following four years of a trade conflict with the USA and uncertainty about the new US administration, continuing a "tough stand" has left its traces. The American rhetoric is less vulgar but still appears to follow similar principles than the previous administration. Meanwhile, China continues to attract FDI and continues opening up sectors for foreign investment. Economic recovery started earlier in China than in many Western countries, giving some headspace for tackling unemployment, strengthening the middle class, domestic consumption and laying the foundation for becoming more independent in key components and technologies.
Externally, the RCEP Free trade agreement is now combining markets of 3.6 billion people, and some of its member countries, which pick up production of low-cost, labour-intensive industries from China, can now export their goods duty-free to China. Beyond this, China stays committed to partnering with and investing in countries along the One Belt, One Road Initiative. For the relation to Europe, the recently signed China-EU Investment agreement forms a platform on which further co-operation will be achieved. The likely effects of this agreement will also fall into the period of the 14th Five Year Plan.
With reaching the threshold of transitioning away from an emerging economy, China takes another role in the international community. This reflects a stronger economic and cultural presence abroad and is seen in joint efforts tackling global challenges and threats.
Whatever specific measures will be taken to roll out the 14th Five Year plan, we will see changes that go far beyond the "reform" of previous plans in terms of quality before quantity.