China’s Economic Crossroads: A British Perspective
Unveiling Economic Challenges
Amidst a crippling real estate crisis, China’s strategists are at a crucial juncture. They must decide whether to invigorate the floundering economy or pursue President Xi Jinping’s dream of a rejuvenated nation.
Fourth Plenary’s Pressing Matters
Economic affairs dominated discussions at the recent fourth plenary session of the Communist Party’s Twentieth Central Committee. Held in Beijing from October 20, the meeting focused on shaping China’s fifteenth Five-Year Plan. Despite this long-term agenda, the immediate economic slump drew attention, especially as new figures showed GDP growth slowing to 4.8%.
A Mixed Economic Picture
External experts have often doubted China’s official statistics. Nevertheless, recent data is concerning. GDP growth dropped from 5.2% to 4.8% in the third quarter. This slowdown results from a struggling economy, exacerbated by the pandemic’s lingering effects and a flagging real estate sector. Additionally, US-imposed tariffs further dampen demand for Chinese exports. Although there has been an uptick in exports to regions like Africa and South America, these gains can’t offset losses in the US market.
Governmental Efforts and Flaws
Despite the government’s fiscal policies aiming to spur domestic demand, they haven’t succeeded. The People’s Bank of China’s monetary easing efforts haven’t boosted spending. Indeed, the existing economic imbalance means encouraging investment worsens the issue. Banks, wary due to the real estate downturn, hesitate to lend, further stifling growth.
Evaluating Past Five-Year Plans
An appraisal of China’s fourteenth Five-Year Plan reveals mixed results. The table below illustrates the objectives and their outcomes:
| Objective | Fourteenth Plan | Fifteenth Plan |
|---|---|---|
| Economic Growth | △ | TBD |
| Technological Self-Reliance | △ | Emphasized |
| Environmental Policies | ○ | Continued |
| Employment | × | Focus Needed |
| Regional Development | △ | Highlighted |
| External Strategy | × | Revise Required |
The fifteenth plan aspires to economic recovery and industrial transformation. Despite commendable goals, it lacks detailed policies, especially in boosting domestic consumption and decentralizing economic control.
Market Distrust
This focus on industrial evolution underscores a central challenge. Continued reliance on state-driven economic control has bred inefficiencies. The fifteenth plan must embrace market liberalization to unleash true potential, yet recent recommendations fall silent on this matter.
Future Projections
For Xi Jinping, successful implementation of the fifteenth plan is vital to cement his leadership. Addressing structural economic issues, instead of mere superficial changes, will be crucial. Ignoring these could deepen stagnation and trigger social unrest.
External Dynamics: A Japanese Angle
Turning to foreign relations, fostering cooperation with Japan should be a priority for China. However, tensions loom since the pro-China Kōmeitō exited Japan’s ruling coalition, weakening Beijing’s connections. With growing US-China frictions, maintaining strong ties with Japan is paramount.
In Conclusion
China’s path forward is fraught with challenges, both internal and external. Successful policy formulation now could define not only its economic trajectory but also Xi Jinping’s legacy. The time has come for decisive action, rooted in market reform and genuine structural solutions.
National Bureau of Statistics
National Development and Reform Commission
