The 13th Five-Year Plan (the Plan), ratified by the National People’s Congress (NPC) in early 2016, presented to the world President Xi’s vision for China’s development over the next several years.
The Plan lays out a vision for China’s medium-term growth with a focus on domestic innovation, well planned urbanization, environmental protection, and increasing economic openness.
China has set the aim of becoming an “innovation nation” by 2020. Innovation is a cornerstone of China’s development strategy in The Plan and is seen to be a requirement ensure the country’s its future global competitiveness. Under the Plan, by 2020 the government seeks to increase its global innovation ranking from 18 to 15. Already we are seeing important demonstrations of Chinese innovation. In October 2017, a report at the 19th National Congress of the Communist Party of China stressed that innovation was the primary driving force behind development. In February this year China and Germany set 11 innovation platforms to strengthen mutual innovation. Beijing’s Zhongguancun Innovation Street saw an amazing 878 start-ups in 2017, with financing of more than 7.6 billion yuan. China’s innovation patent filings surged both in number and quality in 2017. New patent filings numbered 1.38 million last year, up 14.2 percent.
The Plan laid out a strategy of coordinated development to improve urbanization. The goals of this new urbanization push are to raise living standards, and to improve urban planning and public services. The Plan also seeks to establish a new economically integrated “megaregion” in the area around Beijing-Tianjin and Hebei. The urban share of the population in Henan, one of China’s most populous provinces, has for the first time exceeded 50 percent, according to a report released Monday by local authorities. According to the annual government work report in 2017, China will draw up a plan for the development of a city cluster in the Guangdong-Hong Kong-Macao Greater Bay Area. The State Council confirmed China has met all its annual development targets set in last year’s government work report.
The Plan demonstrates the government’s commitment to curb environmental problems by enacting improved environmental laws and regulations. The Plan sets hard targets for city air quality, carbon dioxide emission, and reduction of soil and water contamination. For 2017, a total of 777,000 new energy vehicles were sold in the Chinese market, up 53.3 percent year on year. China’s Environmental Protection Law, was amended in 2016, and enforcement efforts are improving. The Standing Committee had conducted inspections into the implementation of six pieces of legislation related to environment issues. The 13th NPC Standing Committee will continue to prioritize environment-related work in 2018. The committee will continue to review a draft law on soil pollution, revise a law on solid waste pollution. China put 6,335 public interest litigation cases involving ecological protection on file from last July to January.
The Plan seeks to increase economic openness by announcing objecting’s for the expansion of exports and imports, increase outbound investment, and promote international use of the RMB. The Plan, seeks to reduce foreign investment restrictions. The world famous One Belt One Road is the most important example of the push for openness. Trade volume among China and countries along the Belt and Road amounted to 7.4 trillion yuan (about 1.2 trillion U.S. dollars) in 2017, surging 17.8 percent year on year according to the Ministry of Commerce. The growth outpaced the 14.2-percent increase in China’s foreign trade last year. In the meantime, Foreign direct investment into the Chinese mainland in 2017 rose 9.8 percent year on year to reach 803.62 billion yuan (around 122 billion U.S. dollars) in the first 11 months. Beijing welcomes international financial institutions to set up exclusively foreign-owned financial enterprises or financial joint ventures in 2018. China is also expected to pass new measures this year to make foreign investment easier in general.
Overall, China has made great progress in meeting the economic and development goals laid in out in the 13th five-year plan. A review of major initiatives shows major changes and reforms proceeding across the board. Changes identified halfway through the 3th five-year plan are disruptive and transformative. China appears to be on track to achieve these major developmental goals by 2020.