CHINA’S top officials are meeting this week in a hotel in Beijing to sign off on a national development plan for the next five years. The country has travelled far from its command-economy roots, but its policy planning system, an inheritance from the Soviet Union, is one of the most potent remaining vestiges. This will be the 13th five-year plan since the Communist Party took charge of China. Running from 2016 to 2020, it will feature targets for economic growth and objectives such as spurring innovation. What exactly are China’s five-year plans and what can we expect from the new one?
In the era of Mao Zedong, China’s five-year plans were strictly implemented. The Communist party set specific production quotas—for instance, for steel and grain—that work units had to meet. This central direction and, often, misdirection squandered resources to disastrous effect, leaving much of the country impoverished. In the 1980s, as the government loosened its grip on the economy, it also became a bit more relaxed about the five-year plans. Rather than rigid agendas, they have become more like rough guides to how leaders want to steer the country.
The five-year plans are no longer just economic in focus. Much attention is also given to environmental protection (there are targets for cutting carbon emissions and curbing energy use) and to social programmes such as health insurance. In the absence of democracy, the five-year plans are the closest thing to an election manifesto for the Communist Party, laying out its longer-term priorities. But since the party still has overwhelming power, the plans carry more weight than ordinary manifestos. All major actors—local officials, banks and big companies, both state-owned and private—change their strategies and their rhetoric to look like they are in line with the plans.
All eyes will be on China’s GDP goal for the next five years. In the past, targets were often kept below the country’s actual growth rate, making them functionally irrelevant. But under this coming plan, state media have said the new aim could be 6.5% growth, which is faster than many analysts think China can actually achieve. This would put pressure on the government to stimulate the economy if it continues to weaken, a risky path given the large debts accumulated in recent years. Other objectives, from cleaning up polluted air to opening up the financial system, could take a backseat to shoring up growth. China’s five-year plans do not require absolute obedience, as they once did. But they still cast a long shadow.