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The New Five-Year Plan

The 16th Central Committee of the Communist Party of China (CPC) concluded its 5th Plenary Session in Beijing on October 11, having examined and approved proposals for formulating the 11th Five-Year Plan for National Economy and Social Development, setting objectives for the next five years.

Participation and suggestions from the public

On July 27, a booklet containing opinions and suggestions from the general public on environmental protection was sent to State Council. Over 4 million people from the mainland, Hong Kong and Macao, including students overseas, were involved and many of their suggestions would be taken up.

The booklet originated from a nationwide survey by the All-China Environment Federation, China Youth Daily, People's Daily and China Environment News. China Youth Daily's Social Survey Center retrieved and analyzed the data.

The average age of respondents was 29.7 and they mainly came from schools, state bodies and institutions, soldiers and military police, and state-owned enterprises. More than a third were students (25 percent college and 10 percent high school), 71 percent were male, 68 percent had college degrees or above, and 8.2 percent had an income of over 2,000 yuan (US$247).

Two years ago the National Development and Reform Commission (NDRC), in charge of drafting the Five-Year Plan, invited bids for research to inform the process, for the first time in China's economic development.

Yang Weimin, director of the NDRC's development planning department, said China's socialist market economic system has taken shape and the background for planning and implementation has changed greatly.

Yang said that in a planned economy administrative measures were often adopted to realize plan objectives, but in a market economy, enterprises and consumers are involved because of changes in kind, function and content of planning, so social participation makes the plan more applicable.

Application of scientific concept of development

The 11th Five-Year Plan is the first drafted by the CPC Central Committee headed by General Secretary Hu Jintao, the first after the objective of building a well-off society was set, and the first after central government decided to further improve the socialist market economic system.

The importance of using poorer people's quality of life as a starting point and building service-oriented governance has been highlighted, as has seeking fair and harmonious development of the whole of society.

The government began to prepare for drafting the plan in 2003, earlier than in previous years. As with previous plans since reform and opening-up, this plan emphasizes development and adopts a scientific concept of development. 

A harmonious society is the objective, while scientific development is the method to reach it. Scientific development relies on advanced science and technology to realize high-quality and high-efficient development, and seeks sustainable development to build a harmonious society.

The scientific concept of development means China has to change from over-reliance on a cheap labor force, funds and natural resources to well-educated workers and improvement of science and technology, a development mode that not only values quantity and speed but also high quality and energy-saving.

The concept was raised by Hu when visiting Guangdong Province during the SARS crisis from April 10 to 15, 2003, when he asked people to pay attention to the harmonious development of economy and society, sustainable and all-round development.

In June that year, Hu raised the scientific concept of development at a meeting in Beijing reviewing the fight against SARS. One year later, it was included in speeches at the 4th Plenary Session of the 16th Central Committee of the CPC.

The Political Bureau of the CPC Central Committee held meetings on July 25 and September 29 to work on the drafting of the plan. They agreed to adhere to Deng Xiaoping Theory and the "Three Represents" and further implementation of the scientific concept of development.

'Plan' changed to 'layout'

The Chinese name of the 11th Five-Year Plan has changed, with a new word closer to "layout" or "program" being used instead of "plan."

Xin Ming of the Party School of the CPC Central Committee's Research Office said the connotation of the new word was quite different, implying more strategic programming.

From 1952 to 1953, delegations including those headed by then Premier Zhou Enlai went to the former Soviet Union to study, which helped the country work out its 1st Five-Year Plan and implement it from 1953.
During the period of the planned economy, important resources could be allocated specifically, but now there is much more market allocation, so the plan needs to emphasize strategic and macroscopic points.

Human-oriented reform

"Putting people first, setting up a sustainable development concept, advancing the economic society's and people's all-round development," was how the 3rd Plenary Session of the 16th CPC Central Committee summed up the concept of scientific development.

"Putting people first" is not entirely new, since politicians such as Guan Zhong of the Qi Kingdom during the Spring and Autumn Period (770-476 BC) more than 2,000 years ago and Mencius of the Warring States Period (475-221 BC) proposed similar concepts.

Yao Xuange, deputy chief and secretary-general at Shaanxi Ethics Research Academy, said it meant polices should consider people's feelings, respect people's rights, not ignore people's needs and take people's freedom and all-round development as the final aim.

The new Five-Year Plan aims to stress people's development rather than only measures of material increases such as GDP.

Common prosperity on the layout

China's per capita GDP has surpassed US$1,000 and is expected to reach US$3,000 in 2020. Other countries' experiences indicate that the disparity between rich and poor increases in unemployment and the disparity between urban and rural is likely to sharpen at this point of development.

According to Professor Zhu Li, from Nanjing University's Social Science Department, "The government must regulate market deficiencies and support and help people who need it. The more important point is to create a social system and environment that provides equal opportunities."

Hu Angang, chief of Tsinghua University's State Condition Research Center, said common property is not an unreachable aim and would assure social stability and long-term security.

Regional economy incorporated

In mid-September Ma Kai, director of the NDRC, said the new Five-Year Plan would prioritize the Yangtze River Delta, Beijing-Tianjin-Hebei, Chengdu-Chongqing and the old industrial base in the northeast in regional planning.

The replacement of the Pearl River Delta with Chengdu-Chongqing is a reflection of the area's establishment as a well developed economic region with no more need for preferential policies.

Regional economic planning in China focuses on spreading development gains from south to north, east to west and from periphery to center.

South to north development began with the Pearl River Delta economic region in the 1980s, with Shenzhen taking the leading role. It was followed by the Yangtze River Delta economic region led by Shanghai's Pudong area. The Bohai Sea Ring economic region led by Tianjin's Binhai New District plus the reinvigoration of the old industrial base in the northeast are its latest focuses.

East to west development started in the coastal region before shifting toward the west development strategy. The incorporation of Chengdu-Chongqing is an important measure in promoting development of the western region and coordinating regional development.

Periphery to center development prioritizes central areas, following the strategies for the eastern coastal region, the western region and the old northeast industrial base.

Independent innovative capabilities better appreciated

China has become the biggest consumer of the world's major resources, and estimates by international energy institutions predict that between 2002-30, 21 percent of new energy consumption will come from there.

Since opening-up, China's economy has benefited from the introduction of advanced technology and management from abroad. But as it lacks core technology and its own intellectual property, it relies heavily on cheap labor, energy consumption, land resources and preferential policies for a competitive edge.

Seventy-five percent of economic growth in developed countries is attributed to technological advancement, and 25 percent to an increase of investment in and consumption of energy, raw materials and labor. The situation is quite the opposite in China, but it has begun endeavors to boost its own technological capacities.

Systematic reform

Two key changes -- the household contract responsibility system at the beginning of the 1980s and the establishment of the socialist market economy since the 1990s -- will be furthered during the 11th Five-Year Plan.

The CPC central committee has decided that 2005 will be the "most critical" year for China's reform. The key breakthrough will be made in sweeping obstacles from the present system.

Past experiences have shown that the root causes of many economic problems confronting China lie in the country's present systems and mechanisms.

New development mode

Problems such as the rural-urban gap, polarization of rich and poor, waste of resources, environmental deterioration, administrative corruption and low efficiency have amassed over years. Overheated investment since 2003 brought to light the problems that accompanied China's old development mode.

The formulation of the 11th Five-Year Plan signals a complete transformation of China's social and economic development mode.

It will, for the first time, incorporate the idea that economic growth does not equal economic development, economic development does not necessarily result in society's development and that growth is not the goal, but the means of development.

It aims to realize the following strategic goals: to improve innovative capacities, transform the mode of economic development, encourage a cyclic economy, adopt a new route of industrialization and build a society that is energy-efficient, environment-friendly, wholly coordinated and sustainable.

New phase of development

Since China started its 1st Five-Year Plan more than 50 years ago and its opening-up more than 20 years ago, the country has been in a constant quest for social and economic development.
The 11th Five-Year Plan is based on the experience of the past years. It also benefits from a comparatively mature and well-developed systematic theory of reform.

Changes in Five-Year Plans' Economic Focus

(China.org.cn November 9, 2005)

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