Original article by Ni Tao in the Shanghai Daily.
Every five years China unveils a comprehensive blueprint for its economic and social development, commonly known as the five-year plan. This year marks the end of the Twelfth Five-Year Plan (2011-2015), ushering in a raft of official conferences and proclamations on the Thirteenth Five-Year Plan (2016-2020).
Five key elements are incorporated into the new plan — innovation, coordination, environment-friendliness, openness and sharing. Academics and scholars analyzed and discussed these elements at the recently concluded Sixth World Forum on China Studies, held in Shanghai.
According to Zheng Yongnian, a political scientist teaching at the National University of Singapore, addressing economic imbalances will be crucial to implementing the Thirteenth Five-Year Plan. As the government’s obsession with GDP growth steadily recedes, the focus now is on rebalancing the national economy and reconciling growth with environment protection and social equity. Zheng suggested that China make the best of the economic slowdown to restructure its economy.
In his view, the global economic dislocations are the sum of imbalances of individual economies such as the US, EU and Japan. Underscoring the significance of “coordination” and “environment-friendliness” in the Thirteenth Five-Year Plan bodes well for China’s sustainable development and rebalancing the world economy, Zheng claimed.
To some extent, the Thirteenth Five-Year Plan is an updated version of its predecessor, and the most clear demonstration of this is the emphasis on environment-friendliness, said Professor Hu Angang with the School of Public Policy and Management at Tsinghua University. Hu told the forum that over a third of the 24 socioeconomic indicators outlined in the Twelfth Five-Year Plan were about achieving “green” growth. These included reducing emissions of major pollutants and increasing the rate of forestation. “Going green” is no longer an empty slogan as its benefits have been made evident by new forms of poverty eradication, Hu said in a group interview.
In the early 1980s, the rise of so-called “township businesses” — many of which are big polluters — dealt a heavy blow to the environment, leaving us today to clean up the mess at tremendous cost.
An interesting paradox is that the abject poverty that used to be the curse of many localities has been a blessing in disguise — since those places which missed out on the earlier wave of industrialization are now enjoying some of the best environmental conditions.
To capitalize on this environmental windfall, many farmers have converted farmhouses into inns to accommodate urban tourists seeking unspoiled nature. As a result, a great number of backwaters are now seeing what Hu described as “leapfrog” growth.
Being beneficiaries of such “green” growth, they are naturally among the most eager adherents of the new “green” ideology, Hu said. This newfound ecological awareness is in line with President Xi Jinping’s famous speech in 2005, then in the capacity of Party Secretary of Zhejiang Province. In an inspection tour of Anji, a lush county in Zhejiang, Xi said the local verdant mountains are an invaluable asset, like gold and silver mountains, and there ought not to be a trade-off between them — a metaphor for sacrificing the environment for growth.
Apart from environment-friendliness, another highlight of the Thirteenth Five-Year Plan is coordination, which can also be interpreted as inclusive growth.
Martin Jacques, author of the best-seller “When China Rules the World,” asserted that the extent to which China becomes more imbalanced and more unequal will threaten its stability. Jacques noted, however, that inequality across regions has persisted since time immemorial. For example, the Yangtze River Delta is historically a land of fish and rice and still outdoes inland provinces in opulence.
While it has become more or less a cliche to say China is one of the biggest beneficiaries of globalization, Jacques conceded that this force helps some regions more than others, and globalization, together with marketization, has exacerbated these divisions. And this is one of the cases for government intervention in creating greater balance in employment and other areas, Jacques noted.
To be sure, aside from narrowing the wealth gap between the rich and poor, it is also incumbent on officials to raise the efficiency of the Chinese economy, which is chronically plagued by overproduction. Robert Lawrence Kuhn, chairman of the Kuhn Foundation, is an advocate for phasing out overcapacity by letting some inefficient and loss-making businesses to go bankrupt.
Kuhn admits this will be difficult, since bankruptcy has been seen as a bad word in China, “but it’s really a cleansing of the system.” “There’s pain of course. Workers will be unemployed, but it’s part of the market economy,” said the famed China watcher.
He encouraged the reform of state-owned enterprises, saying that some of them are textbook examples of “too big to fail” businesses waiting for the government to bail them out during periods of financial distress.
What the government should do is play a regulatory role, preventing monopolies, corruption and insider trading, all of which, said Kuhn, will help set rules that lead to compliance.
Written by Ni Tao.