Archives for posts with tag: five year plan

At China’s annual meeting of its top legislative body, three draft reports are usually submitted for delegates to discuss and approve.

They comprise the premier’s government work report, the National Development and Reform Commission’s economic development report, and the Ministry of Finance’s budget report.

The documents provide a review of the past year and explain how the central authorities will govern the country in the coming year.

This year’s plenary session will also review and approve the proposed 13th five-year plan for the period from 2016 through to 2020. 

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Here are the five key points to take away from the draft plan and reports.

1. Growth target set at 6.5 to 7 per cent

This year’s proposed target for gross domestic product expansion has been set at a range between 6.5 per cent to 7 per cent.

The range, rather than a specific number, reflects China’s dilemma between pursuing economic growth and pushing ahead with reforms.

Innovation would be the top driving force for future growth, according to Li’s work report.

2. Hong Kong, Macau to play bigger roles in China’s economic development; Taiwan policies to be maintained

Beijing will “elevate Hong Kong and Macau’s positions and roles in China’s economic development and opening up” according to their “distinctive strengths”, Li said.

In its draft 13th five-year plan, also released on Saturday, China pledged to support Hong Kong in furthering its status as a global financial, shipping and trading hub.

He added that Beijing would adhere to previous policies on Taiwan, “firmly oppose secessionist activities” and maintain peaceful development of cross-strait ties.

3. Further interest rate liberalisation; government-managed floating system to stay

China has pledged to further liberalise interest rates and stick to a government-managed floating system.

Beijing aimed this year to keep the yuan generally stable on a “reasonable and balanced level” and to control “abnormal flow of cross-border capital effectively”, according to the annual report of China’s top economic planner, the National Development and Reform Commission.

4. China to boost overseas defence

The premier also pledged to improve China’s ability to protect its citizens and businesses abroad.

China would ensure that the G20 summit in Hangzhou this September would go smoothly, Li said. Beijing would “participate constructively” in seeking solutions for global issues, he added.

The government has budgeted 954 billion yuan (HK$1.13 trillion) for defence spending this year – a 7.6 per cent increase from last year. 

5. Slack officials warned, blundering ones to get second chance, rewards for innovators

Li warned officials against neglecting their duties.

China has been facing a situation in which many cadres chose not to perform their duties at all for fear of making mistakes and getting hauled up amid the country’s ongoing corruption crackdown.

Li warned that the Communist Party would have zero tolerance for officials who slacked off on their jobs. There was room for correction for those who made mistakes and rewards for innovators, he said.

See the full article from the South China Morning Post here.

 

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One of the new notions Premier Li Keqiang put forward in this year’s Government Work Report on March 5 is a “New era of mass tourism”.

In it, the phrase “Paid vacations” appears again as a fundamental aspect of the trend. “We will ensure people are able to take their paid vacations, strengthen the development of tourist and transport facilities, scenic spots and tourist sites, and recreational vehicle parks, and see that the tourist market operates in line with regulations. With these efforts, we will usher in a new era of mass tourism,” he said.

Premier Li’s mention of “Paid vacations” has ignited widespread public reactions.

Liang Jianzhang, co-founder of Ctrip (a leading online travel agency), who views tourism as the most promising industry in the future, believes that the implementation of “Paid vacations” is an incentive to Chinese economy. He maintains that “the average number of travels made by Chinese tourists is still far below that of the developed countries, so in the decades to come, China’s tourism industry will have to make great strides and will eventually become a significant driver for economic growth. During this process, opportunities for innovation and employment will increase”.

In Liang’s opinion, facilitating paid vacations can bring a new cycle of tourism consumption and investment-as long as competent travel products can be developed, stable profit can be expected in the long run.

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As far as public holiday arrangement is concerned, several proposals emerged into the spotlight during the ongoing two sessions, all of which focus on a modification of the current holiday arrangement. NPC deputy, deputy director of Shaanxi Provincial Tourism Bureau CSU Mingzheng proposesthat the Spring Festival holiday should be extended to 10-12 days from the current 7-day vacation.

Whatever the solution, what can’t be denied is the substantial potential China has for tourism and Chinesepeople’s ever-increasing need to upgrade their consumption style. According to reports of theNational Tourism Administration, in 2015, 120 million Chinese went overseas and spent$104.5 billion.

“Tourism is a high-level spiritual need”, said Liang Jianzhang, and this inner driving force candefinitely lead China into an era of mass tourism.

See the full article from China Daily here.

China has recently announced new details of it’s 13th five year plan.

The five year plan system is a Soviet-style planning technique  from China’s Communist past, but it remains a pivotal feature of the Chinese government. We are currently just concluding the twelfth version of the plan. The full details of the thirteenth version will only be revealed in March 2016, when the 13th Fifth Year Plan is unveiled in full.

Focus: Balancing the economy

Attempts to steer the economy into a new direction formed a large part of the last five year plan.

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Graphic from the Telegraph.

China’s leaders have stated repeatedly they want to move away from a dependence on low-cost exports towards more sustainable growth that relies on the service sector, high-end manufacturing and domestic consumption. Analysts widely expect the party to ditch its 7% target growth rate over the course of 2016-2020.

Instead, party officials seem more likely to concentrate on metrics such as job creation and wage growth as a better gauge of sustainable economic growth and, perhaps more critically, social cohesion.

However, growth targets are still likely to remain ambitious, hovering somewhere around 6.5-6.9% over the next five years. This is still on the optimistic side of most independent estimates, which forecast growth averaging just under 6%.

Other headline topics:

The abolition of the one child policy- This is one of many social welfare changes. The goal is to alleviate the social strains caused by an ageing population and an escalating dependency ratio and is meant to be seen as a “gift” to Chinese society from the government. Other changes include extending elderly insurance to the full population through state funds, overhauling the healthcare system and promoting education specifically for 16-18 year olds.

Real objectives towards environmental policy- This reflects the popular social movement which has built over the past year as well as the impending Paris summit on climate change taking place in December.

An anti-corruption campaign- The campaign is the most extensive and brutal we have seen in recent years. Xi commented back in September that the fight against corruption “never ends”. In keeping with this message, the Fifth Plenum endorsed the removal of 10 former Central committee members on charges of corruption.

As more details emerge about the plan, China’s area of focus will become more clear.