Beijing (AP) – With a new five-year plan, China wants to free itself from its dependence on the United States and the rest of the world.
In view of the trade and technology war with Washington and the global economic recession caused by the crown pandemic, the new economic plan aims to make the country more independent.
The ruling elite of the Communist Party decided on the most significant realignment of the second-largest economy in a long time at the end of four-day deliberations in Beijing on Thursday.
After the plenary session of the Central Committee, a statement declared that independent innovation should be enhanced and China’s development as a “scientific and technological powerhouse” should be accelerated. It is necessary to strengthen the domestic market and create a “new pattern of development.” Instead of concentrating on rapid growth rates as before, China would prefer to promote “high-quality development”.
The Central Committee expressly approved the new strategy of “two business cycles” promoted for months by the leader of the State and the Party, Xi Jinping. While it emphasizes China’s openness, it emphasizes promoting the domestic market as the main engine and innovation itself for greater independence. The experts spoke of a “major shift in China’s economic policy,” which was declared as a response to US pressure and anti-globalization trends.
The plan could open up new opportunities for German companies, for which China was the main trading partner in 2019. “Investments or research cooperation in strategically important areas are more important than ever for China in view of the geopolitical environment,” he said Max Zenglein of the China Institute Merics in Berlin of the German press agency. “For German companies that want to participate, China is rolling out the red carpet.”
The aim of the project is to promote domestic demand as well as research and development for the “internal circulation” as the “pillar of the economy”. The “external cycle”, that is, international trade and foreign investment, has a supporting role. The fourteenth five-year plan for the period 2021 to 2025 will be approved in March at the annual meeting of the popular congress.
“China is now realizing that it is vulnerable,” said Wang Huiyao, an adviser to the Chinese government and founder of the Center for China and Globalization, Bloomberg finance agency. He referred to US sanctions against Chinese tech giants, such as the largest network equipment maker and second-largest smartphone maker Huawei. “That’s why leaders need to be prepared for something like technology decoupling.”
According to Merics expert Zenglein, China does not want to separate itself from the global economy. “Fighting for greater independence should not be equated with a process of disengagement,” he said. “With outward headwinds expected to pick up, China’s leadership is confident of absorbing global value chains.” Beijing is “well aware” of the importance of foreign companies in China for economic development.
The plenary was the party’s highest meeting since the outbreak of the crown pandemic nearly a year ago. The infections were first discovered in December in the central Chinese metropolis of Wuhan. With strict measures, quarantine, entry bans, and massive testing, the world’s most populous country has largely controlled the virus. Very few smaller shoots remain. This allowed the economy to normalize again.
With the coronavirus under control, the country is likely to be the only major economy to grow this year. After a sharp drop at the beginning of the year, China’s economy again grew 4.9 percent in the third quarter compared to the same period a year earlier. This means that a growth of 0.7 percent has been achieved since the beginning of the year.
The new five-year plan should also learn lessons from the management, at least initially inadequate, of the corona outbreak and strengthen the health system. The Covid-19 pandemic revealed an incomplete system of notification and monitoring of infectious diseases, insufficient training of medical workers and an unbalanced distribution of resources between urban and rural areas, said epidemiologist Zeng Gang of the Chinese Department of Health (CDC). ) of the newspaper “Global Times”.