Plenum to execute ‘new normal’ theory

By Chen Heying Source:Global Times Published: 2015-10-27 0:48:01

Five-Year Plan to adapt to slower growth

The 18th Central Committee of the Communist Party of China (CPC) convened its fifth plenary session Monday in Beijing, a meeting observers believe will focus on defining an economic "new normal" in the next five years.

This will be a key period to realize the Party's goal to ensure all Chinese people live a better-off life.

The meeting, which includes some 200 members of the CPC Central Committee, ends Thursday.

Although no details about the meeting were released on the first day of the closed-door discussion, it is projected to outline the 13th Five-Year Plan (2016-20) for national development.

The 13th Five-Year Plan is set to be a key period for China's goal of building a "comprehensively well-off society," the Xinhua News Agency reported in June. Five-year plans have been drafted since 1953 to map strategies for economic and social development, setting growth targets and development policies.

Experts agreed that the "new normal" of China's economy will be discussed throughout the meeting and there will be a focus on compiling the five-year economic blueprint, given the current slowdown.

Restructuring slowing economy

The "new normal" is characterized by a shift from the previous high speed to a medium-to-high speed growth and upgrading economic structure, President Xi Jinping was quoted by Xinhua as saying in November 2014.

"The new normal has constituted a firm footing for mapping out economic development strategies since the annual Central Economic Work Conference was convened in early December 2014," said Gong Weibin, director of the Research Center of Social Governance at the Chinese Academy of Governance.

"During the 13th Five-Year Plan, the economic downturn will continue," Chen Dongqi, an economist with the National Development and Reform Commission and a member of the panel of 13th Five-Year Plan, was quoted by the China News Service as saying on Friday. "China's annual GDP growth is expected to maintain at around 6.5 percent in the next five years, down by over 1 percentage point compared to the 12th five-year period," Chen said.

After the country's third quarter growth recorded 6.9 percent, according to data released on October 19, the lowest since 2009, officials reiterated that the government will not attempt to defend a certain growth rate, but will focus on quality growth.

Gong said that innovation, startup companies and service industry development will be prioritized to restructure the economy and adapt to the new normal conditions.

"In particular, a shift from investment to the service sector as well as consumption to drive domestic demand is anticipated," Zhao Xiao, a professor at the University of Sciences and Technology Beijing, told the Global Times.

Massive bank loans were used for economic stimulus after the 2007 financial crisis, which generated considerable non-performing assets and hindered the ongoing economic restructuring, he said.

Mechanisms for encouraging the development of emerging industries, such as online and high-tech industries, will also be deliberated, Zhao said.

Echoing Zhao, Lu Feng, a professor of economics at Peking University, said that policies on regional economy planning, including the "Belt and Road" initiatives, are expected to be further elaborated.

Poverty alleviation

Poverty alleviation and improving livelihoods are listed among the 10 goals of 13th Five-Year Plan by the People's Daily, according to its official Sina Weibo account.

Under the leadership of the CPC, Chinese people have laid a firm foundation to accomplish the first Centenary Goal of comprehensively building a moderately prosperous society by 2020. China has vowed to alleviate poverty for 70 million poor people by 2020, a goal to uplift all citizens below the poverty line.

Experts agreed that the government will face great challenges in  eradicating poverty if the economic downturn persists.

"It is crucial to increase earnings among low-income groups while eradicating poverty," Zhao noted, saying that the goal might be achieved by promoting urbanization and providing more room for developing small and medium-sized private enterprises.

Lu added that wider coverage of social security constitutes an essential part of preventing people from returning to poverty.

In addition, adjustments to family planning policy are also expected to be discussed during the meeting. However, Lu estimated that specific changes to such controversial policies are unlikely to happen, given the agenda of past meetings.

10 key areas in plan

Ensuring continuing economic growth

Adjusting economic development mode

Optimizing industrial structure

Boosting development driven by innovation

Speeding up agricultural modernization

Systemic reforms

Coordinated development

Building an ecological civilization

Improving people's livelihood

Poverty relief

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