NCCPC to likely see Xi’s vision for China’s future

Before Xi Jinping took over the leadership his predecessors maintained Deng Xiaoping’s original vision to transform China’s into a ‘moderately prosperous’ society (小康社会).

"China’s growth and debt risks appear to have diminished, but there are still a slew of outstanding issues to be addressed.” 

Operationally the leadership adopted a simple rule of quadrupling (翻两番) the per capita GDP for every 20 years. Deng targeted to increase China’s GDP fourfold from 1981 to 2000 and Hu Jintao also said the same for the period of 2000 to 2020. 

Supply-side structural reforms will continue to be Xi’s economic policy, Deleveraging, capacity reduction, and property destocking seem to have gained some early success.

China’s growth and debt risks appear to have diminished. But there are still a slew of outstanding issues to be addressed, such as the rise of income inequalities and reliance on the property sector.

As China’s global influence continues to rise, Xi’s vision will likely be different from his predecessors and will extend beyond 2020.

In 2013, he hinted at striving for ‘the great Chinese revival’ (中华民族伟大复兴) by the 100th anniversary of the People’s Republic of China and launched his ‘Belt & Road’ initiative. The 14th Five Year Plan will require him to define a new position for China in the global economy. 

The NCCPC

The NCCPC is held every five years, followed by seven plenary sessions (‘plenum’). The NCCPC ‘elects’ the Party’s General Secretary and  decides on important economic strategies which are usually presented at the third plenum one year later.

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From the early 1980s to early 1990s, China’s leadership was searching for a way to practise market economics in a socialist country.

The country’s economic success in the past few decades has strengthened the belief that China cannot merely copy the Western capitalist model.

In addition, Xi may coin a new ideology as the current operational target (doubling 2010’s per capita GDP by 2020) may expire soon.

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Transforming China’s economy from a credit-intensive, property-led growth model will still be the authorities’ key strategy in the near term. 

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Initiatives like capacity reduction, deleveraging and property destocking will be intact during the second half of the 13th Five Year Plan. The goal is to achieve sustainable growth underpinned by a ‘New Economy’.

Raymond Yeung is Chief Economist Greater China & Betty Wang is Senior China Economist at ANZ