Old Liturgy for New Targets

The Plenum of the Central Committee of the Chinese Communist Party drafted the 12th five-year plan. The document will be enriched by the contributions of territorial structures and finally approved by the National People’s Congress next Spring. It will be the blue print for the Government actions for the years 2011-2015.
The old liturgy is respected, the phraseology is kept, but the substance is very different from the past. Nowadays, the plan has only a pale resemblance to the rigidity of the Maoist era. After 30 years of opening and reforms, the document must address economic and social growth, which now widely relies also on private hands. Notwithstanding, it indicates targets and tools for the Government.
The country’s path will lead to a more balanced and sustainable development, with GDP’s annual increase of approximately 7%. In this framework, the first ambition is to reduce social differences. Income and territorial divides are to be mended. Previous objective was the “harmonious growth”, aimed at reinforcing the common good and neutralize social protests.
Today, the Party seeks an “inclusive growth”. The difference is important: citizens left behind are not only to be helped, but to be included in the value chain of a growing country. The issue is no longer only ethical, but becomes also an economic-one. More people will be involved in the production process, rather than being helped by the State, through income re-distribution.
Beijing will use different means: incentives, preferences, exemptions, innovative finance. The privileged sectors will be: energy efficiency, environmental protection, aerospace, high-speed railways, telecommunications, off-shore drilling, biotechnology, pharmaceutical machines and medical devices new IT and media, ocean exploitation. The society’s transformation will be accelerated. Urbanization will continue, but mostly driven by low-income second and third tier cities. Big coastal cities, whose yearly per-capita income already passed 8.000 US$, are already congested.
The 12th plan highlights the necessity of a strong green economy. The environment sector represents not only a moral obligation, but also a source of profits: its importance anticipates big changes. Finally, specific care will be given to welfare system reform with two main objectives: reaffirm social equity and reduce the high rate of personal savings.
Once liberated by the uncertainty of the future (which encourages an abnormally saving rate), citizens are more prone to spend. Overall consumption will increase and contribute to a different concept of growth. The general rise of salaries, expected to double in 5 years, goes in the same direction. Overall, the country appears mature enough to progressively change its model. The choice was impossible at the initial stage of reform, because accumulation of wealth was the only target. Now, China’s economic conditions are undoubtedly improved; as a consequence, the five-year plan might lose importance, but it gains the freedom to draft scenarios without the burden of necessity.