security and national interest to dominate development; innovation becomes synonymous with self-sufficiency; China’s rise to now be driven by an ultra-large domestic market

The Party’s 5th Plenum, just concluded, lays down ideological markers for the next 5-year plan. Xi is now the ‘helmsman’ of all social and economic development: an accolade anchored in the charisma of Mao.

Xi’s ‘dual circulation’, equipped with a robust domestic ring and new modes for global cooperation and competition, will underpin macro-economic planning over the next five years. Indigenous innovation and self-reliance will be paramount. Playing a lead role in global affairs becomes secondary. National security, factoring in post-COVID-19 external risks and ‘baselines’, displaces it.

plenum consolidates Party authority

The plenum communiqué, issued ahead of the final blueprint, projects an unsurprising image of perfect unity among the Party’s upper echelons. But attendees, some 370 full and alternate members of the Central Committee, who reviewed and approved its ‘proposals’ were never likely to dissent. Rather than spirited debate, a Plenum is an occasion for the leadership to imprint on the wider Party the doctrine set by its dedicated drafting group.

As with the 13th 5-year plan, the proposal committee was likely headed by Xi with Premier Li Keqiang at his side. Xi has stronger support (due inter alia to personnel changes) across the Politburo this time. And his mark can already be seen on virtually all key priorities, not least in the ‘proposals’ extolling successes on all fronts under Xi. Further variations on Xi Jinping Thought and a flurry of his ‘important directives’ will undoubtedly permeate the final version of the plan. This consolidates his authority ahead of the National Party Congress of 2022, after which he is widely expected to stay in power.

a plenum for the ages

5th plenums since 1995 have focused on 5-year plans but this year’s was even weightier in the Party’s eyes. Its first centennial goal is within reach: calling for unremitting efforts towards victory over absolute poverty, the nation formally advances to ‘moderate prosperity’. The impending plan will usher a new stage of social and economic development: a new chapter in the New Era.

Longer-term, 15-year targets have emerged as well. Not unprecedented (the 5th Plenum in 1995 outlined targets for 2010) they are heavy with political meaning. The period leading up to 2035 looms in Party teleology, portending a ‘basically modernised’ socialism with Chinese characteristics. It is the midpoint in Xi’s national rejuvenation project running to 2049, pushing to realise the second centennial goal: building a ‘modern socialist great power.’

The ‘superiority’ of Party governance featured in the 4th Plenum, COVID-19 provided unexpected means to test the claim’s validity. Boosting Party confidence and reinforcing its legitimacy at home, the crisis resulted in a new domestic focus. Beijing now accepts the external environment is likely to further deteriorate and global markets become more uncertain.

innovation to power domestic loop

The details of the plan will be made public only after receiving symbolic approval by the National People’s Congress plenum, one of the ‘Two Sessions’, to be held in March 2021. Yet the 5th Plenum communiqué gives a glimpse of key policy movement.

The catch-all term ‘innovation’ has become synonymous with self-sufficiency. The bulk of attention in boosting it domestically will be on innovation across all key industries, likely through a boost to R&D intensity in fields considered strategic to national interest. Training upgrades will direct a steady flow of talent to critical industries. Across the ag sector, a drive for modernity and efficiency address ever-present food security concerns.

New growth models will be powered from within. Tapping consumer spending will be vital. The resulting ultra-large domestic market will, in turn, underpin strong dual circulation. Enlarged domestic demand must organically integrate with concurrent supply-side reforms, while traditional industries are upgraded with internet and digital technologies. Innovation towards high-quality development, again, is at the heart.

High-quality and sustainable models are touted to replace old quota-driven development. As expected, there are no GDP growth targets on the horizon. Rural revitalisation will be stressed as poverty policy moves from alleviation to relapse prevention. Public health’s focus is similarly shifting from treatment to prevention, pushing the Healthy China plan forward, and expanding long-term care provision to cope with ageing demographics.

Environmental policy is in the spotlight after Xi’s 2060 carbon neutrality pledge. ‘Ecological civilisation’ is still the goal. Total green transformation of economic and social development is called for, pushing low-carbon and green development forward.

Security concerns are to permeate every aspect of social and economic development. Security should be understood broadly, it is as much about economic security as it is about people’s livelihood, as much about social stability as it is about external risk. New and traditional security strategies are moving towards prevention and mitigation of any risks that could influence China’s modernisation.

after all a COVID plenum

Plans and plenums are not to be lightly dismissed. This 5th plenum indeed delivers noteworthy shifts of top-level policy orientation (fangzhen). Yet the shifts of orientation are no match for the gravity of the situation. They are not moves that credibly ‘make China great again’, but responses to COVID-19. As Xi draws ever more on the twilight glimmer of Mao the Helmsman, so the Party clothes itself in the image of ideological unity beneath which there is little new appeal.

in case you missed it…

cp.signals—domestic policy movement
14th 5-year plan outlook: health in an ageing society
14th 5-year plan outlook: macroeconomic planning

cp.positions—audit of shifts across policy sectors
cp.position: society, governance, global impact
cp.position: macroeconomy, agriculture, scitech, energy and environment—monthly roundup
september: green pledges
august: ramping up dual circulation