In recent months, China has been buzzing with anticipation about a major meeting of Communist Party leaders that was expected to chart a new course for the country’s slowing economy. The anticipation was high, as people hoped this meeting would unveil a bold plan to kickstart growth.
On Sunday, the much-awaited plan was unveiled, and it turned out to be a hefty document, with over 300 steps addressing everything from taxes to religion. The strategy seems to echo familiar themes, with a notable focus on bolstering high-tech manufacturing and advancing scientific innovation. However, it didn’t directly tackle some of the pressing issues that have been troubling the economy, such as plummeting real estate prices and the millions of unfinished apartments left by failed developers.
Economists have been pushing for a significant shift in China’s economic strategy—moving away from heavy investment and steering towards boosting consumer spending. But the newly released document, which is about 15,000 words long in its English translation, offers only a cautious nod towards expanding consumption. It suggests refining long-term mechanisms to encourage consumer spending, but the call remains rather vague.
The Central Committee’s plan, unveiled on Sunday, is a clear continuation of its industrial policy. The Communist Party has reiterated its commitment to promoting the development of strategic industries. The focus will be on eight key sectors, including renewable energy and aerospace. This aligns closely with the goals of the “Made in China 2025” initiative, which aims to reduce the country’s reliance on high-tech imports by ramping up domestic production.
It’s worth noting that similar plans in the past, such as one from 2013, had provisions that never really took off. For instance, there was an ambitious proposal to introduce a nationwide property tax to help local governments raise funds, but it never materialized.
In light of this, Sunday’s plan proposes a different approach. It suggests that the central government should shoulder a greater share of the country’s expenditures, aiming to alleviate the financial burden on local governments, which have accumulated significant debt. Although the plan also touches on expanding local tax revenues, it only briefly mentions a real estate tax, leaving many questions unanswered.
Another significant aspect of the document is its reflection of Xi Jinping’s preoccupation with national security. In his statement following the Central Committee’s meeting, Xi highlighted concerns about frequent local conflicts, escalating global issues, and increasing external pressures. This focus on national security seems to take precedence over economic reforms.
Since the Central Committee’s meeting wrapped up and the initial statement was released, there has been a wave of skepticism about whether the new policies will actually lead to a substantial change in the trajectory of China’s economy. The country is grappling with slowing growth and mounting debt, and many observers feel that the latest plan doesn’t offer a clear departure from existing priorities. As noted by the European Union Chamber of Commerce in China, the immediate focus appears to be on balancing economic recovery with national security concerns while maintaining social stability.
Additionally, the document reflects the leadership’s concern about demographic challenges. With a declining birthrate and an aging population, the plan includes measures to improve maternity leave policies and establish childbirth subsidies. It also suggests gradually raising the retirement age in a cautious and orderly fashion, hinting that these changes could be voluntary. China currently has one of the lowest retirement ages in the world, averaging just 54 years.
While the retirement age adjustments were presented cautiously compared to more contentious reforms in other countries like France, they still triggered a wave of criticism on Chinese social media. Many of these critical posts were swiftly removed, indicating active government censorship.
Lastly, the document also reaffirms Xi Jinping’s stance on religious control, particularly concerning China’s Muslim minorities. The plan calls for a systematic promotion of the “Sinicization” of religion and strengthening the rule of law in religious affairs. This move underscores Xi’s continued commitment to maintaining strict controls over religious practices in China.
In summary, the new plan released by China’s Communist Party leadership offers a mix of familiar strategies and cautious reforms. While it continues to emphasize investment in high-tech industries and national security, it falls short of addressing some of the more immediate economic concerns and pressing issues like real estate and local government debt. The plan’s impact on the economy and social issues remains uncertain, leaving many to wonder if it will be enough to steer China towards a new era of growth.
Login