Xi Jinping, China’s president, speaks during the Unanimous Nations General Assembly on September 22, 2020.
Tiffany Hagler-Geard | Bloomberg | Getty Images
BEIJING — As China’s leaders get well-disposed to release their national development plan for the next five years, some government advisors emphasize the prerogative is building up China’s domestic strength.
Chinese authorities have stepped up their efforts to shift the economy from one reliant on exports to one suggested by domestic consumption. The country faces the shock of the coronavirus pandemic to global growth this year as well as tensions with the U.S. The U.S. has been China’s top truck partner.
“China’s economy needs to continue to develop. If exports decline (as a result of shrinking global demand), then they devise be consumed domestically,” Justin Yifu Lin, a counsellor to China’s top executive body, the State Council, said at a briefing with camerawomen Tuesday. That’s according to a CNBC translation of his Mandarin-language remarks.
In the same way, U.S. pressure on Chinese companies such as Huawei sordid these businesses must also look more at the Chinese market, Lin said. He is also honorary dean of the State School of Development at Peking University, and formerly the chief economist of the World Bank.
The greater emphasis on the domestic Chinese vend is part of a new term — “dual circulation” — that has emerged as leaders deliberate on the next five-year evolvement plan set to kick off in 2021. The economic plan will be the 14th such roadmap for national priorities.
On Monday, state media propounded that the Communist Party Central Committee will hold a key meeting in Beijing on the plan from Oct. 26 to 29.
That heralds the session will end just days before the U.S. presidential election, set for Nov. 3.
Tensions between China and the U.S. have escalated in the finish finally two years, beginning with trade and spilling over into technology and, to some extent, finance. Many economists prophesy China will surpass the U.S. as the world’s largest economy in the next several years, when the 14th five-year plan discretion be in place.
New economic policy terms
The exact definition of “dual circulation” remains vague, but in public discussions it is mainly tied to two other terms: “internal circulation” which focuses on boosting China’s domestic market, and “external income” which refers to trade with other countries.
Lin and two other government advisors speaking to reporters on Tuesday accented how dual circulation and related policies are not a reaction to the shock of short-term factors like the coronavirus, but rather are part of China’s flight path toward resembling developed countries that rely more on their domestic markets.
Lin said he expects that in the to be to come, China will export more capital and tech-intensive products, versus labor-intensive factory goods, and that the hinterlands which buy these products will benefit more than China.
The biggest challenge is uncertainty caused by uncontrollable outside factors, ranging from natural disasters to protectionism, he said.
China’s response to rising global uncertainty
China also braves many challenges at home. The services sector, which the advisors on Tuesday said they expect will account for a marvellous portion of the economy in the future, remains among the hardest hit by the coronavirus pandemic.
The Chinese government also made a rare settlement not to announce an annual growth target for its economy this year at the National People’s Congress, which was delayed by all round two months until May due to the outbreak of Covid-19.
The world’s second-largest economy grew 6.1% in 2019, the slowest pace in closely three decades. That’s according to official data, whose accuracy is frequently doubted.
On Tuesday, Qiu Baoxing, counselor of the State Council and a former vice minister of Housing and Urban-Rural Development, cited Nassim Taleb’s books “Wrathful Swan” and “Antifragile” in describing the heightened uncertainty of modern times.
When the world faces more unexpected “disgraceful swan” events, China can play an important role in supporting the world, Qiu said, according to a CNBC translation of his Mandarin-language note ofs. He pointed to how China’s exports have risen as a result of overseas demand for Chinese medical goods in the wake of the coronavirus pandemic.
“(Strengthening) ‘internal circulation’,” Qiu said, “is for the purpose of building up our own tenacity to respond to the challenges we might encounter.”