China urged to focus on domestic market for better economy for next five years to combat International hostility


China’s policy plan should be focused on its vast domestic market, home-grown technological innovation and improving its citizens’ welfare, according to recommendations in a new paper.

The report by the Chinese Academy of Social Sciences (CASS), a think tank affiliated with the State Council, foresees the next five years presenting “major changes unseen in a century” for China, as “the strategic game between superpowers has intensified, while international systems and orders are reshuffled”.

While the report does not mention the coronavirus specifically, its recommendations suggest that China should become more self-reliant in response to the pandemic. This view represents one side of a lively debate among policymakers and scholars in China, ahead of the next five-year plan, which will come into place next year.

Between 2021 and 2025, the globalised economy which helped China grow into an economic power will be radically different, the report said, meaning it must adapt if it is to continue to thrive.

“The disadvantages of economic globalisation have increasingly stood out. Populism has risen as the global economy weakens, while countries are divided as imbalances expand. The old multilateral [trading] system is under pressure,” read the paper, part of a wave of preliminary studies offering advice ahead of China’s 14th five-year plan, a blueprint for economic and social development.

China is the only major economy that publishes a five-year policy plan and has been doing so since 1953, in a tradition borrowed from the Soviet Union. China’s own plans are broad strategic guidelines, rather than Moscow’s previously detailed command economy production worksheets. China is currently in the final year of its 13th five-year plan, the stage during which the Soviet Union collapsed. The 14th plan is expected to be published in early-2021, but brainstorming about challenges and policy options is well under way among academics and state planning officials.
That debate is expected to feature prominently in the coming meetings of the “Two Sessions,” the Chinese People’s Political Consultative Congress, which is due to meet in Beijing on May 21, and the National People’s Congress, which will begin to meet a day later. A common point in the debate is that the lessons of the past few years have shown the need to be more self-reliant. Even before the coronavirus outbreak, the US-China trade war and the growing superpower rivalry have made many think that Beijing can no longer rely on the goodwill of trading partners to continue the expansion it has enjoyed since the late-1970s.

In December 2017, US President Donald Trump declared China a “strategic competitor” in anticipation of the Chinese economy reaching two-thirds the size of America’s, which happened in 2018. Since then, the two have engaged in a tit-for-tat tariff battle, while the coronavirus has served to sharpen tensions and fuel arguments for further decoupling.

China now has a middle income group of between 500 and 700 million people and that alone can be a source empowering China’s economic growth for the next five years, the report said.