China is set to play down the nation’s headline growth rate to highlight “growth quality” and “security” in its development plan for 2021-25 and beyond. President Xi Jinping chaired a gathering of the Politburo on Monday, and the body endorsed the country’s five-year plan for 2021-25 as well as a grand plan that will serve as a guideline for China’s economic and social development through 2035. Both plans will be presented for approval at a major party meeting next month.
As the final version of the five-year plan is expected to be published only after it is approved at the late-October meeting, Beijing has been busy building up a consensus on its new domestically focused dual-circulation strategy.
Justin Lin Yifu, a professor at Peking University said that the dual-circulation strategy is about achieving “high-quality” development. Lin, who served as the World Bank’s chief economist, has a track record of predicting China’s potential economic growth rate. In August, he said China would surpass the US as the world’s largest economy by 2030. He did not provide any numbers at the press conference on Tuesday but said China will rely more on its domestic economy while seeking international cooperation. Lin said China’s new economic strategy was not a short-term measure to cope with the Covid-19 pandemic nor tensions with the US. However, the worsening China-US relationship is too significant for China to ignore in the drafting of its strategies. Beijing’s drive to develop a home-grown chip industry, at the risk of over investment and wasting resources, is in direct response to growing US restrictions of technology exports to Chinese companies.