China approves five-year plan, eyes at least 6.5% growth
March 16, 2016, 4:38 pm

China’s National People’s Congress is looking to double the GDP growth by 2020 [XInhua]

Approved by about 97 per cent of the more than 2,800 delegates, the plan sets a framework for economic growth at a pace of at least 6.5 per cent.

That’s less than the 9.9 per cent average economic growth in the 30 years to 2010.

In terms of GDP growth, the five-year plan is more grounded in the new realities that China’s economic growth is going through a corrective phase, as the focus shifts to domestic consumption and local markets.

Chinese Premier Li Keqiang told a press conference after the final NPC session that his government has full confidence in the bright future of China’s economy.

“We won’t suffer a hard landing, but in our transition we’ll have difficulties and hopes.”

Last year, Beijing had forecast a 7 per cent growth rate for 2015. That figure actually came in at 6.9 per cent.

Beijing is now predicting 6.5 to 6.9 per cent growth for 2016, reverting back to the system of range forecasting as used in the 1990s.

The five-year plan places increasing focus on how to reform the country’s juggernaut economy as major industrialized nations face global recession and stagnation.

China will target medium to high economic growth to 2020, seeking to double its GDP and per-capita income during that time.

The health of the world economy and China’s increasing role in keeping the global dynamo churning likely figured prominently as the Committee’s 205 members met to formulate the 13th Five-Year Plan.

The Plan will outline national priorities, set economic and social development targets, and produce landmark political reforms that will greatly impact the world economy.

Last summer’s government intervention – devaluing the yuan currency by some 3 per cent, and considering using government coffers to replenish capital for investment projects – signals that the Central Committee is likely to seek ways to balance micro and macroeconomic restructuring as the annual growth rate appears to be below 7 per cent.

Chinese leaders have affirmed earlier statements to move the economy into one that is consumption based (moving away from heavy reliance on exports) and market-driven.

By setting this goal, Chinese authorities will impose far less regulation on pricing products and services by 2020.

The Five-Year Plan, the communique says, will empower local authorities in a bid to boost entrepreneurship and domestic innovation.

In order to meet as yet undisclosed consumption targets, the CPC will push to fashion an economic strategy that it says is based on balanced, inclusive and sustainable economic development.

The CPC communique indicates that this will be achieved by looking at China’s existing demographic realities. The Five-Year Plan will aim to significantly reduce poverty by 2020.

But one of the most significant and far-reaching decisions is the rescinding of the 30-year-old one-child policy and allow some 90 million eligible couples to have up to two children.

The CPC sees this as a socio-economic imperative because of its extensive ageing population and as a means to increase domestic consumption.

In the meantime, the government will introduce reforms to its health care sector in a bid to guarantee coverage for all its citizens.

The BRICS Post with inputs from Agencies