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THE last several months have been a bonanza of information and analysis for China watchers worldwide. First， the country’s new politburo was elected last November at a once-in-five-year national congress of the Communist Party of China. The 2013 NPC and CPPCC sessions then saw the fresh-faced leadership in action in public for the first time. The world’s media is increasingly turning its attention to such meets in China as they seek answers to a series of questions about the country’s future. They include： What are the prospects for the Chinese economy？ What does the future hold for reform and opening-up policy？ Will China change its foreign policy after growing more influential？
To answer these questions we take a closer look at the myriad of commentary and statistics produced at and by the two meets –the 18th National Congress of the CPC and the recent 2013 NPC and CPPCC sessions， known for short in China as the lianghui.
GDP Growth – 7.5 Percent
The government work report delivered by Premier Wen Jiabao on March 5 outlined the economic plan for 2013， the most striking factor of which was an economic growth target of 7.5 percent — the same target as that set in 2012.
Pan Gongsheng， deputy governor of the Chinese central bank， believes that the figure， which represents a tradeoff between development velocity and quality， fully reflects the demands of economic restructuring and transforming the pattern of China’s economic growth.
This year’s government report articulates that China has put the people’s interest first and strived to ensure and improve their wellbeing. It states that the government will do all it can to increase employment and improve the social security system.
In his report to the 18th National Congress of the CPC， Hu Jintao gave ecological progress a more prominent position by incorporating it into the country’s overall development plan together with economic， political， cultural， and social progress. A similar emphasis was found in Wen’s work report. Wen went into detail on the imperatives to reduce energy consumption and solve air， soil and water pollution.
The CPC national congress also marked the first time the wording “beautiful China” appeared in a keynote Party political report. The phrase – which is a call for sustainable development – has been taken up this year in government work reports at local People’s Congress meetings by provinces and municipalities. In short， environmental protection is on the agenda in China， big-time. Reputable economist Li Yining has forecast that China’s economy will grow steadily in 2013. A growth rate of between seven and eight percent is normal for China at this stage. Double-digit growth rates will rarely be seen in the future， he added.
Some commentators have questioned the 7.5 percent growth target， saying that it represents a China that is running out of steam. This couldn’t be further from the truth. We mustn’t forget that 7.5 percent is still a very high growth rate compared to those seen in Europe and the U.S. In fact， the only big economy that came close to that rate in 2012 was India， at 5.3 percent.
China’s continued economy prosperity – and rela-tively high growth rate – is a vital boost to the world economy， especially at a time of general economic malaise. China especially injects vitality， jobs and growth into other developing countries.
On the topic of how long China’s strong growth will last， Justin Lin proved very optimistic. Lin is former senior vice president and chief economist of the World Bank， and now acts as honorary dean of the National School of Development at Peking University. He predicts that China will be able to sustain annual growth of about eight percent for 20 years. Technological innovation and industrial upgrading constitute the key to long-term economic development for any country. He is confident that China has immense potential in both aspects.
Wan Gang， minister of science and technology， disclosed that research and development investment in 2012 was RMB 1.024 trillion， accounting for 1.97 percent of Chinese GDP – very close to the two percent target. Good news took the form of statistics showing that enterprise investment in R&D accounted for 74 percent of the total. It is now the main driving force behind innovation in the country.
As China develops indigenous technology， the country is embarking on the road to greater selfdependence and an innovation-based economy. The trend already shows in exports： China’s exports of high-tech products topped the world in 2012.
Comments and reports by the leadership given during the lianghui revealed that developments in urbanization， agricultural modernization and building a new countryside were expected not only to solve poverty， but also become a new driving force behind China’s economic progress.
The first policy document issued by the CPC Central Committee and the central government in 2013 encouraged urban industrial and commercial capital to develop modern agriculture and animal husbandry. Xu Xilong， president of the Gansu provincial branch of the Agricultural Bank of China， reported that over 13 million people move from rural to urban areas every year， each of whom creates RMB 500，000 of fixed asset investment and RMB 10，000 of consumption demand. According to estimates， total fixed asset investment in urban areas will increase by RMB 6.5 trillion per year， and residents’consumption by RMB 130 billion.
As a key measure of economic restructuring， do-mestic demand now accounts for more than half of China’s GDP. Minister of Commerce Chen Deming reported that total retail sales of consumer goods topped RMB 21 trillion last year， compared to RMB 9.4 trillion five years ago. The contribution of domestic consumption to China’s GDP now stands at 51.8 percent， way higher than the 39.6 percent of five years ago.
A More Open China
Opening wider was another hot topic at the recent NPC and CPPCC meets. Remarks that Vice Minister of Commerce Chen Jian made during discussions suggest that more sectors of the economy will be open to foreign investment. Chen said the significance of the move would be on par with China kicking off reforms in 1978 and the country’s entering the WTO in 2001.
Minister of Commerce Chen Deming pointed out at a press conference on March 8 that the 18th CPC National Congress report reiterated the task of promoting the nation’s opening up. He said that over the last 11 years since China joined the WTO， the country had fulfilled all of its commitments. “China has joined hands with 15 countries in creating free trade zones； another 13 are already proposed. These statistics alone reveal how far China has gone in opening its doors to the world，” Chen said.
These strategies have brought China scores of benefits. “Five years ago， China’s total volume of foreign trade was US $2.2 trillion. Last year it reached US $3.87 trillion， “ Chen said.
Since the country flung open its doors， international investment has surged into China. For three consecutive years， foreign capital has registered US$110 billion. Last year， the world’s total FDI dropped 18 percent， and the inflow to China experienced a slight decline of 3.7 percent. The fall is attributed to global market conditions. Nonetheless some countries increased their FDI to China： the U.S. made outbound investments in China of US $3.13 billion， an increase of 4.5 percent； Japan tallied US $7.38 billion， a rise of 16.3 percent， while Germany registered US $1.47 billion， a big leap of 29.5 percent over the year before.
In an interview， Chen Jian reiterated that China has always welcomed foreign investment. The form of this investment has changed， however： at the country’s early stage of opening-up， it attracted foreign capital to produce more labor-intensive products. Nowadays there are significant opportunities for foreign investments in high-tech products， new materials and modern service industries.
To answer these questions we take a closer look at the myriad of commentary and statistics produced at and by the two meets –the 18th National Congress of the CPC and the recent 2013 NPC and CPPCC sessions， known for short in China as the lianghui.
GDP Growth – 7.5 Percent
The government work report delivered by Premier Wen Jiabao on March 5 outlined the economic plan for 2013， the most striking factor of which was an economic growth target of 7.5 percent — the same target as that set in 2012.
Pan Gongsheng， deputy governor of the Chinese central bank， believes that the figure， which represents a tradeoff between development velocity and quality， fully reflects the demands of economic restructuring and transforming the pattern of China’s economic growth.
This year’s government report articulates that China has put the people’s interest first and strived to ensure and improve their wellbeing. It states that the government will do all it can to increase employment and improve the social security system.
In his report to the 18th National Congress of the CPC， Hu Jintao gave ecological progress a more prominent position by incorporating it into the country’s overall development plan together with economic， political， cultural， and social progress. A similar emphasis was found in Wen’s work report. Wen went into detail on the imperatives to reduce energy consumption and solve air， soil and water pollution.
The CPC national congress also marked the first time the wording “beautiful China” appeared in a keynote Party political report. The phrase – which is a call for sustainable development – has been taken up this year in government work reports at local People’s Congress meetings by provinces and municipalities. In short， environmental protection is on the agenda in China， big-time. Reputable economist Li Yining has forecast that China’s economy will grow steadily in 2013. A growth rate of between seven and eight percent is normal for China at this stage. Double-digit growth rates will rarely be seen in the future， he added.
Some commentators have questioned the 7.5 percent growth target， saying that it represents a China that is running out of steam. This couldn’t be further from the truth. We mustn’t forget that 7.5 percent is still a very high growth rate compared to those seen in Europe and the U.S. In fact， the only big economy that came close to that rate in 2012 was India， at 5.3 percent.
China’s continued economy prosperity – and rela-tively high growth rate – is a vital boost to the world economy， especially at a time of general economic malaise. China especially injects vitality， jobs and growth into other developing countries.
On the topic of how long China’s strong growth will last， Justin Lin proved very optimistic. Lin is former senior vice president and chief economist of the World Bank， and now acts as honorary dean of the National School of Development at Peking University. He predicts that China will be able to sustain annual growth of about eight percent for 20 years. Technological innovation and industrial upgrading constitute the key to long-term economic development for any country. He is confident that China has immense potential in both aspects.
Wan Gang， minister of science and technology， disclosed that research and development investment in 2012 was RMB 1.024 trillion， accounting for 1.97 percent of Chinese GDP – very close to the two percent target. Good news took the form of statistics showing that enterprise investment in R&D accounted for 74 percent of the total. It is now the main driving force behind innovation in the country.
As China develops indigenous technology， the country is embarking on the road to greater selfdependence and an innovation-based economy. The trend already shows in exports： China’s exports of high-tech products topped the world in 2012.
Comments and reports by the leadership given during the lianghui revealed that developments in urbanization， agricultural modernization and building a new countryside were expected not only to solve poverty， but also become a new driving force behind China’s economic progress.
The first policy document issued by the CPC Central Committee and the central government in 2013 encouraged urban industrial and commercial capital to develop modern agriculture and animal husbandry. Xu Xilong， president of the Gansu provincial branch of the Agricultural Bank of China， reported that over 13 million people move from rural to urban areas every year， each of whom creates RMB 500，000 of fixed asset investment and RMB 10，000 of consumption demand. According to estimates， total fixed asset investment in urban areas will increase by RMB 6.5 trillion per year， and residents’consumption by RMB 130 billion.
As a key measure of economic restructuring， do-mestic demand now accounts for more than half of China’s GDP. Minister of Commerce Chen Deming reported that total retail sales of consumer goods topped RMB 21 trillion last year， compared to RMB 9.4 trillion five years ago. The contribution of domestic consumption to China’s GDP now stands at 51.8 percent， way higher than the 39.6 percent of five years ago.
A More Open China
Opening wider was another hot topic at the recent NPC and CPPCC meets. Remarks that Vice Minister of Commerce Chen Jian made during discussions suggest that more sectors of the economy will be open to foreign investment. Chen said the significance of the move would be on par with China kicking off reforms in 1978 and the country’s entering the WTO in 2001.
Minister of Commerce Chen Deming pointed out at a press conference on March 8 that the 18th CPC National Congress report reiterated the task of promoting the nation’s opening up. He said that over the last 11 years since China joined the WTO， the country had fulfilled all of its commitments. “China has joined hands with 15 countries in creating free trade zones； another 13 are already proposed. These statistics alone reveal how far China has gone in opening its doors to the world，” Chen said.
These strategies have brought China scores of benefits. “Five years ago， China’s total volume of foreign trade was US $2.2 trillion. Last year it reached US $3.87 trillion， “ Chen said.
Since the country flung open its doors， international investment has surged into China. For three consecutive years， foreign capital has registered US$110 billion. Last year， the world’s total FDI dropped 18 percent， and the inflow to China experienced a slight decline of 3.7 percent. The fall is attributed to global market conditions. Nonetheless some countries increased their FDI to China： the U.S. made outbound investments in China of US $3.13 billion， an increase of 4.5 percent； Japan tallied US $7.38 billion， a rise of 16.3 percent， while Germany registered US $1.47 billion， a big leap of 29.5 percent over the year before.
In an interview， Chen Jian reiterated that China has always welcomed foreign investment. The form of this investment has changed， however： at the country’s early stage of opening-up， it attracted foreign capital to produce more labor-intensive products. Nowadays there are significant opportunities for foreign investments in high-tech products， new materials and modern service industries.