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China moves boldly into the post-Covid era

Manu Bhaskaran
Manu Bhaskaran10/2/2020 07:00 AM GMT+08  • 10 min read
China moves boldly into the post-Covid era
China’s impending changes in economic strategy will have substantial effects on the global economy and geopolitical developments.
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As all eyes are focused on the presidential election in America on Nov 3, another highly consequential political event will soon take place in China. In late October, the Fifth Plenum of the current Chinese Communist Party’s Central Committee will probably approve the outlines of the country’s 14th Five-Year Plan. The plan will serve as a roadmap of how China intends to adapt to a new world, one marked by growing American hostility, rapidly evolving technological disruptions and the widening impact of climate change. A new model of development is needed to confront these challenges as well as to overcome domestic headwinds such as a gradually declining labour force, rising labour and other costs, imbalances in finance and investment and still-high disparities in income and wealth.

Since China now makes up about 18% of the global economy, whatever it does has huge implications for the rest of the world. Over the past few months, the authorities have been giving hints as to the broad strategies that will be ratified in the final Plan. In essence, China’s planners will seek to rebalance the economy – making it more self-reliant in its sources of demand as well as technology while taking steps to reduce structural weaknesses. The result should be a vibrant Chinese economy, characterised by slower but higher quality growth and one that is much more resilient. A key question, though, is whether China can pull this off without reforming some parts of its political system.

What are the objectives of the next five-year plan?

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