China Set for New March after the 18th CPC National Congress
January 9, 2013, 10:57 am

Columnist Minghao Zhao analyses the message of the CPC National Congress and explains what 2013 holds for the second largest economy in the world.

As we look back at 2012, economic concerns from the Eurozone crisis, the slowdown of the US economy, anaemic global outlook for growth weigh heavy. But no single event, other than the US presidential election, was as keenly watched by the world as the once-in-a-decade power handover in China.

The 18th CPC National Congress was an event of vital importance to China’s own future development as well as the world’s. The country’s economy has been rapidly growing for three decades, and it became the second largest economy by nominal GDP in 2011. In the aftermath of the financial crisis, China has been providing much-needed fuel for the regional and global economies.

As the country’s most important political event in 2012, its implications would be far beyond the economic field. As Xi Jinping, who now leads the party, put it, the Congress has unveiled in an explicit manner which banner the CPC will hold, which path it shall tread, which ideological state it will maintain and which goals it is trying to achieve.

The conference came at a very crucial moment when the country stands at crossroads again; while the world itself is undergoing fundamental transformation economically, politically, and socially. On one hand, after more than 30 years of rapid development, China not only has achieved a lot, but also confronts a myriad of various problems. On the other hand, many have talked about the increasing uncertainties regarding the future direction of China’s development and its foreign relations.

The CPC has taken economic development as its core mission since the third plenum of its 11th Central Committee in 1978, when it decided to launch the reform and opening-up drive. But for now it has to continue such drive in a far bolder and smarter manner.

Reforms, reforms and more reforms

As Hu Jintao declared in his report, China must deepen its economic reform and expedite the transformation of its economic growth model. The CPC has set new targets and missions of reforms in various fields. China will, after all, stick to socialism with ingrained ‘Chinese characteristics’. In this sense, the 18th Congress is rather another passing of the relay baton. However, the CPC has to draw lessons from the pitfalls of its past.

The “Scientific Outlook on Development” becomes the banner of such a new march. The term might pose a bit murky for many foreign observers. To the author’s understanding, it represents the willingness and resolve of the CPC to figure out a development path of sustainability and equitability. Lightning quick economic growth at the cost of cheap labor, environmental damage and over-exploitation of natural resources is simply unacceptable.

The “Scientific Outlook on Development” was added into the CPC Constitution during the 17th Party National Congress in 2007 and in this year’s Congress it has been approved to the paramount guiding principle for the “entire process” and “all aspects” of China’s modernization in the decades to come.

Hu declared that China will try its best to push forward the transformation of the economic structure and ensure relatively high growth and sustainability of future development. The Chinese citizen looks well-entrenched on a growth trajectory–both GDP and the personal average income of China in 2020 will double those of 2010.

The emphasis on personal average income in this Report is a noteworthy development. These livelihood-oriented objectives are akin to similar plans raised by Japan in the early 1960s. It means the average annual growth of individual income of China has to hit 7.2 per cent by 2020. It would not be very challenging given the average income growth for urban and rural residents in the last decade reached 9.5 per cent and 7.4 per cent. The precondition is its success to transform its growth model and follow an economic pathway emphasising innovation, inclusivity and green growth.

Increase of middle-income group

Hopefully, such objective would lead to the enlargement and empowerment of China’s middle-income group. According to the studies by the Asian Development Bank and other private institutions, there would be a population of 500 million to 600 million who belongs to the middle-income group. It would facilitate the consumption-driven growth of China and provide huge economic opportunities for its partners across the world.

Nevertheless, doing the right things is one thing, and doing the right things in the right way is quite another. The CPC must stand up to the underlying challenges and carry out comprehensive measures to realise the above objectives, including three key tasks.

Firstly, addressing the widening income gap occupies a high place on the CPC’s policy agenda. In the last decade, per capita GDP in China increased from $1,200 to roughly $5,400, but public discontent with inequity of income distribution has been growing. The CPC has to strike a new balance between the efficiency and fairness in economic development to turn the tide of disenchantment.

A “beautiful China”

Secondly, what the Chinese people want is not merely the ‘good life’ but also a rich China environmentally. The CPC’s impetus on “ecological civilization” needs to be strengthened far much. Recent years have witnessed the Chinese Government battling the challenges of environment protection, air pollution, and food and water safety.

The “beautiful China” of Hu’s report entails the synergy between the government and civil society organisations. At its core lies the mandate of governance innovation and political participation.

Thirdly, a clear-cut attitude and plan towards the much talked about Chinese political reforms has to be set in place by the CPC. Admittedly, nobody could find a textbook answer and give a convincing prescription for democratisation of China, which has a population of 1.3 billion and a 5,000-year old civilization legacy of the Middle kingdom. The Communist Party has been determined to independently choose a path to democracy that suits China’s national conditions.

According to Hu Jintao, consultative democracy is the right way and the ruling party should “enhance consciousness and initiative of conducting political consultation”. What it most certainly has to do is widen the channels for the general public to express dissatisfaction and exercise surveillance and check over the government. The cancer of corruption, he warned, can be fatal to Chinese stability.

As the ruling party, the CPC is well aware of the challenges and potential difficulties. Paramount consensus at the Congress has been that China has ‘no choice but to continue its reforms’. The new generation of leadership must bear this in mind that the further China marches, the more challenging the reforms tasks would be and it would need to muster all the political revolve and resilience that it can.