The fifth plenum of the 19th Central Committee of the Chinese Communist Party (CCP) adopted a resolution on the 14th Five Year Plan (2021-25), which in March 2021 will be submitted to the annual session of the National People’s Congress (NPC), China’s legislature, to be turned into a legal document. The resolution also included long-range economic objectives for the economy till 2035. While the full details of the plan will only be published in March next year, the broad outlines are already being discussed in Chinese media. Further developing the domestic market and promoting the Belt and Road Initiative (BRI) abroad are two of the highlights of the plan. Moreover, there is a strong emphasis on innovation and China’s own technological development to become less reliant on foreign technology and on the promotion of a green economy which by 2060 should be carbon neutral.

China’s leaders also promised to actively participate in the reform of the global economic governance system. China will widen market access for foreign enterprises and turn itself into a “gravitational field” that attracts the world’s high-quality production factors and resources and a fertile ground for foreign investment by building a market-oriented, rule-based and international business environment, the China Daily reports. Contrary to previous five-year plans, the 14th Five Year Plan did not include an annual growth target, which was set at 6.5% in the in the 13th Five Year Plan.

Two of China’s new development strategies outlined in the plan are the “dual circulation” model – with a focus on domestic demand – and the innovation-driven core national strategy – which calls for major breakthroughs in core technologies. Both strategies have been widely discussed domestically and globally as a major shift in China’s development strategy. At the first ever press conference organized by the Central Committee of the Chinese Communist Party (CCP), Han Wenxiu, Deputy Director of the Office of the Central Commission for Financial and Economic Affairs, said that “dual circulation” does not mean “only domestic circulation,” and that China will continue to open up its market at a higher-level to foreign businesses. “No matter how the international situation changes, we will never waver in our basic national policy of opening-up,” Han said.

The communique mentioned the words “reform” and “opening-up” more than 20 times, which sends a clear message to the world that China will stick to deepening reforms and expanding opening-up to enhance mutual benefits and win-win cooperation with other countries, Foreign Ministry Spokesman Wang Wenbin said at a news conference. John Ross, former Director of economic and business policy for the Mayor of London and currently a Senior Fellow at the Chongyang Institute for Financial Studies at Renmin University of China, said he believes China will remain committed to economic globalization, which is the best road for global development. Koh King Kee, President of the Center For New Inclusive Asia, a Kuala Lumpur-based think tank, said that the blueprint promotes green and high-quality development while pushing for more balanced growth through rural vitalization, urbanization and coordinated regional development. Ning Jizhe, Vice Chairman of the National Development and Reform Commission (NDRC), said that “The country will comprehensively promote consumption toward the green, healthy and safe spectrum, develop service consumption and encourage new consumption models and new business forms. We will place more emphasis on promoting the stability of policies and market expectations as well as on smoothing out economic circulation”.

Since the reform and opening-up policies were adopted over four decades ago, China’s economy has heavily relied on revenue from exports based on its massive manufacturing sector as well as investments in roads, railroads and other infrastructure. Up until 2006, exports still accounted for over 35% of China’s GDP, but that proportion dropped to a little over 17% in 2019 – meaning about 83% of GDP came from internal circulation, experts said. While external factors may have played a role in that decline, the chief reason was the rapid rise of China’s consumption power following decades of wealth accumulation. China’s per capita GDP exceeded USD10,000 in 2019, the urbanization rate reached 60%, and the population of the middle-income group surpassed 400 million. In 2019, Chinese shoppers spent about CNY41.2 trillion on consumer goods, contributing nearly 58% to China’s GDP growth that year, the Global Times reports. “We have said that China had a chance to surpass the U.S. as the world’s largest consumer market, and the epidemic might lead China to inch closer to, and even slightly exceed, the U.S. domestic market,” He Maochun, Professor at the Institute of International Studies of Tsinghua University, said, noting that sluggish production, epidemic impact, trade policies, and unemployment have seriously undermined U.S. spending power.

The transaction volume of technical contracts in China exceeded CNY2 trillion for the first time in 2019, setting a record high. This reflects the market’s huge demand for technologies and shows the great potential of the nation’s technical market. China will expand international scientific cooperation on climate change, energy, public health and other topics of global concern by setting up new research funds to support scientists around the world to jointly tackle these subjects, Wang Zhigang, Minister of Science and Technology, said. At the same time, China will strengthen intellectual property protection, optimize its legal and policy environment to support research and innovation and provide more opportunities and convenience for foreign scientists to work in the country. He added that planners placed self-reliance in science and technology at the forefront of all projects in the five year plan, but that this does not mean that China is closing itself off from the world, the China Daily reports.