China is seeking to reform its economy by means of its thirteenth Five-Year Plan, to create what is being called the New Normal economy. This is intended to address the challenges facing the country, explained Chinese Education Ministry Deputy Minister (State Committee of Social Sciences) Professor Gu Hailiang at the Human Sciences Research Council in Pretoria on Tuesday.
He pointed out that his country suffered from poverty and growing inequality. "China also faces the problem of significant economic imbalances," he added. The major ones were imbalances between the prosperous eastern coastal provinces and the poorer western inland provinces, between the urban and rural areas and between the industrial and agricultural sectors.
The thirteenth Five-Year Plan will target these imbalances. To this end, a series of new "philosophies" has been approved to orientate the plan. "The guiding philosophies proposed for the thirteenth Five-Year Plan can be summed up in five words," he highlighted, "innovation, coordination, green, open and sharing."
Innovation will be focused on three major areas. "We should deepen reform in the social market economy," he listed first. Second, innovation should be promoted in science and technology. Certain areas have been identified in which to seek breakthroughs, including integrated circuits, broadband Internet, pharmaceuticals and nuclear. "And, thirdly, the selection and cultivation of talent and individuals."
"The second key word is coordination. We need to balance the development of the east and west and between industry and agriculture," he explained. There was also the need to develop the country's remoter regions and its ethnic minority groups.
Green refers to green development. "China has faced very severe environmental problems," he noted. "The Chinese government gives great importance to recovering ecosystems. ... President Xi Jinping had attached great importance to the protection of ecosystems." Future development must not harm the environment. "So, in the next five years, the Chinese government will put much emphasis on employment and the protection of ecosystems."
Open, or openness, refers to an open economy. "China's achievements come from opening up to the outside world," stressed Gu. And China will continue to be open to the outside world. He cited the initiatives of the Silk Road, which will develop terrestrial communications routes from China through Central Asia to the Middle East and Europe, and the Silk Route, the maritime counterpart to the Road, involving the expansion of existing and the construction of new ports and port facilities. Another example is the creation of the Asia Infrastructure Investment Bank. Furthermore, "President Xi Jinping has come up with a number of initiatives for cooperation between China and Africa." Gu highlighted that further opening up to the outside world was essential if China was to achieve the objectives of the thirteenth Five-Year Plan.
"The fifth key word is sharing," he said. Party, government, business and people have to work together to build the country. "The Chinese government and people have full confidence in implementing the thirteenth Five-Year Plan and reaching its goals."
The result will be the New Normal economy, with a medium/high level of economic growth (7% year, to create all the jobs necessary to absorb China's workforce) instead of a very high, double-digit, growth rate that the country could no longer sustain. "The second very important aspect of the New Normal is the upgrading of the industrial structure," he stated. This will include the implementation of advanced technologies. In parallel, there will also be the development of information technology, agriculture and urbanization, to ensure "healthy" economic development.
"The third aspect of the New Normal of economic development is the transformation of the drivers of economic growth." Energy inefficient and polluting approaches will be replaced by energy efficient and environment-friendly ones. The final result will be an economy that is focused on the quality of its products, not their quantity.