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Growth Taking Back Seat in New China Economic Plan

FILE - China's chairman of National Development and Reform Commission Xu Shaoshi speaks during a session at the World Economic Forum (WEF) in China's port city Dalian, Sept. 9, 2015.

A top Chinese economic planning official has said that while China is confident it can maintain medium to high growth from now until 2020, the country’s next five year plan will put more emphasis on jobs, wages and consumer prices.

Xu Shaoshi, chairman of China’s National Development and Reform Commission said that while there are all kinds of views about the Chinese economy, and persistent downward pressure, the country’s economic expansion will continue at a reasonable pace.

“While we will be working to maintain medium to high growth during the next five year plan, the speed of growth is not the only thing that we will be concerned about. In fact, we will be more concerned about employment, wages and consumer prices,” he said.

Speaking at a briefing Tuesday that outlined some of the government’s economic and social development goals for the next five years, Xu said that innovation would also be key.

New priorities

“One of the biggest challenges that our country faces is navigating the middle income gap, and one key way out of doing that is to promote the development of innovation,” Xu said.

Growth has long been a key benchmark that China’s ruling Communist Party has used to highlight its claimed success in managing what has become the world’s second largest economy. And for years, China’s role as the world’s factory and its massive exports helped bolster that growth.

But now as wages rise in China and factories move to countries where labor is cheaper, the country is looking to be more than just the world’s factory.

Xu said that in addition to innovation, China will also do more to open up its markets to foreign investment — an area that is an increasing source of concern among overseas enterprises. The plan will also seek to better coordinate gaps in the country’s growth from north to south and east to west and address the need for greener and cleaner development.

“The public’s strong protests and calls to improve the environment demand that we continue to promote a basic national policy that encourages efficient use of resources and protection of the environment,” Xu said.

Xu did not say what China’s target for growth would be during the five-year period. Shortly after the briefing, the state-run Xinhua news agency said 6.5 percent annual growth would be the lowest that growth would slip during the next five year period.

Despite officials’ confidence that growth will not slip too far too fast, some analysts believe that China is already fudging its figures and that the country’s closely watched economic expansion has already slipped below that point. Others, believe that if not now, growth will eventually fall even further, with some predicting it could slide to around five percent by 2020.

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