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China's 2020 vision

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Reprinted from RT

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Everybody's doing the Shisanwu. Well, at least hundreds of millions of Chinese are.

Here's the pop version; call it the new Chinese five-year plan for dummies. You can even sing along, as you mull how to break down the road map for China's economic and social development from 2016 to 2020.

The People's Daily said the 13th five-year plan is mostly about economic growth, institutional reforms, the environment, and poverty alleviation. What's unsaid is that's a make-or-break road map for China to escape the dreaded middle-income trap.

The first glaring feat of Shisanwu is to enshrine President Xi Jinping's by now famous "new normal" -- as in China's economy entering a slower, sustainable growth pattern; still a whopping 6.5 percent a year down from the current 7 percent. Premier Li Keqiang has stressed that China needs 6.5 percent over the next five years if it is to become a "moderately prosperous" society.

Beijing Renmin University professor Zhao Xijun breaks it all down: "The timing of the 13th five-year plan is crucial, because by 2020, the nation is supposed to have met its first centenary goal, marking the 100th anniversary of the party's founding [in 1921], to complete the building of a moderately prosperous society."

Yet how's that superhuman task to be accomplished? Essentially, by Beijing shifting the focus from labor intensive manufacturing leading to exports, the basis of the model so far, towards a service/consumption economy, with a key role also for modernized agriculture.

Everyone in Asia knows how Chinese manufacturers have been steadily losing that famous "competitive edge," as labor and land costs rise, especially in the developed Eastern seaboard. So Xi's "new normal" implies a complex process of transferring jobs from manufacturing to the service sector. That also implies increased Chinese innovation in technology, industry, design and business management.

Meet the zombie killer

A five-year plan may be seen as a relic from China's Soviet-style economy. The first five-year plan was indeed penned in 1953, a straight copy from the USSR. Yet CCP conservatives insist strong state control is a must, given notorious Western market disasters such as the 2008 sub-prime mortgage-induced financial crisis.

The draft plan is something like 100 pages long; listing Beijing's main policy goals and loads of important targets, related to economic growth, exports, direct foreign investment and job creation. Virtually all central ministries and agencies, as well as provincial, regional and municipal governments, contribute to the draft.

With the guidelines published by the State Council, planners from central government ministries and agencies, as well as regional governments, will have to get down and figure out all the details. The plan will then be debated at the annual session of the National People's Congress in the spring of 2016.

International Finance Centre (IFC), Central, Hong Kong
International Finance Centre (IFC), Central, Hong Kong
(Image by Khairul Anuar Bin Bakhtiar)
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Xi -- fresh from his recent, spectacular, tour de force in the former British Empire -- had been very busy promoting and explaining the road map. From May to July, he met party leaders from half of China's 31 provinces, way before the stock market crisis and China's quarterly GDP growth plunging below 7 per cent for the first time since 2009.

This week, party leaders spent many hours reviewing the draft of the plan at the Jingxi Hotel in western Beijing, as part of the closed-door Fifth Plenum of the CCP.

All of them are of course familiar with the man with the plan: Liu He, one of Xi's top economic advisers, an industrial economics graduate of Renmin University with a Masters in public administration at Harvard.

Liu He also happens to be the vice-director of the National Development and Reform Commission, the all powerful agency that creates policies for China's economic and social development.

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Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia (more...)

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