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CPC Sets Blueprint for Next Five Years

The 16th Central Committee of the Communist Party of China (CPC) concluded its Fifth Plenary Session in Beijing on Tuesday afternoon, which examined and approved a proposal for the formulation of the 11th Five-Year Plan for National Economy and Social Development (2006-2010).

 

The four-day meeting involved 191 members and 150 alternate members of the CPC Central Committee, and its Political Bureau presided over the proceedings.

 

Hu Jintao, general secretary of the CPC Central Committee, gave a working report on behalf of the Political Bureau and Premier Wen Jiabao explained the proposal. The new Five-Year Plan, the roadmap for development over the next five years, will bring revolutionary changes, according to analysts in Beijing.

 

From "Getting Rich First" to "Common Prosperity"

 

The theory proposed by the late chief architect of China's reforms, Deng Xiaoping, in the 1970s was that to allow some people to get rich first will give way to "common prosperity" that will bridge the growing gap between rich and poor and avoid polarization of society.

 

A shift of emphasis toward “common prosperity” is a historic adjustment to the pattern of five-year plans since China changed its approach to economic and social development in the 1970s.

 

"It shows that the CPC will give special attention to the construction of a balanced mechanism under a market economy," said Hu Angang, an expert on macroeconomics at Tsinghua University.

 

After the economic reforms of 1978, Deng’s principle of allowing some regions and people to get rich first departed from egalitarianism, but managed to energize the country, said a Xinhua report.

 

More than 20 years later, GDP per capita has risen above US$1,000 and is expected to reach US$3,000 in 2020.

 

But rapid economic growth has engendered new problems.

 

The lowest-income families, the bottom 10 percent of all families, own less than 2 percent of all residents' assets, while the highest-income families, the top 10 percent, own over 40 percent, according to government statistics.

 

Chinese leaders have warned against extremes of poverty and wealth, increasing unemployment and intensified social conflict.

 

"Common prosperity is not an unreachable goal, but the basic principle and pursuit of socialism," said Hu.

 

From "Growth Rate" to "Sustainable Development"

 

The recognition that economic growth is not equal to economic development and that growth is not the final goal of development, will be included in the 11th Five-Year Plan for the first time, said analysts.

 

Top leaders have criticized old concepts of economic growth many times, saying that "economic development at the center" does not mean "with speed at the center."

 

Blind pursuit of economic growth has led to blind investment, damage to the environment and false statistics. Leaders are worried that without changing China's concept of growth, the economy might develop an unbalanced structure with a lack of driving power.

 

In the 11th Five-Year Plan, economic growth will be defined as "serving the people to improve life quality," said analysts.

 

"A prediction can be made that in the next five years China will pursue growth in a fair, balanced and sustainable way," said Tang Min, chief economist at the Asian Development Bank's China office.

 

China will control the use of foreign investment in the 11th Five-Year Plan period, said experts.

 

According to government figures, foreign trade accounts for over 70 percent of China's economy. Frequent trade frictions have caused huge costs to the economy.

 

China has become a major consumer of energy resources in the world. International energy institutions predict that from 2002 to 2030 around 21 percent of the world's new demand for energy resources will come from China. In 2004, nearly 50 percent of the petroleum used in China was imported.

 

China will try to change its heavy reliance on foreign investment and resources to secure its national economy in the next five years, said analysts.

 

Favorable to Social Services

 

The new five-year plan will bolster social services to deal with the imbalances in economic and social development, said analysts.

 

China's top leaders stressed that it has become urgent to solve the problem of strong economic growth accompanied by weak social development.

 

The problem of social security is particularly serious in the countryside, where the medical care system and welfare are extremely weak.

 

During the period from 1993 to 2003, the number of people with no access to medical insurance increased from 900 million to one billion, from 67.8 percent to 80.7 percent. The number in urban areas rose from 96.53 million to 300 million.

 

"In the next five years, China will place more emphasis on science and technology, education and health care in policy and investment," said Ding Yuanzhu, researcher at the National Development and Reform Commission’s Economic and Social Development Research Institute.

 

All rural children are expected to enjoy nine years of free education by 2010, which will reduce farmers' economic burden by 100 billion yuan (US$12.37 billion) every year, analysts said.

 

"The poor and the weak will get more protection and have greater access to social welfare," said Ding.

 

(Xinhua News Agency October 12, 2005)

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