China's modern planning system

By Heiko Khoo
0 Comment(s)Print E-mail, June 22, 2015
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Overcoming imbalances in the development of social welfare and improving administrative competence and public services became the focus of the 11th Five-Year Plan. It was composed of binding, anticipatory and indicative targets. This established a direct link between policy priorities and the leaders of major institutions and state-owned enterprises. The action of cadres was shaped by discipline and reward systems linked to state planning priorities.

Various sub-plans also exist: China's urbanization plan seeks to shift economic geography to develop the interior of the country through massive investment in infrastructure. Regional sub-plans are granted significant autonomy and allow for experimentation and competition in policy implementation. National special plans concentrate on large-scale investments in infrastructure, the use of key resources, and the provision of core public goods and services. These plans are developed during the Five-Year Plan period and they include industry specific plans. The drawing up of such plans involves multi-level and multi-agency consultation and the elaboration of targets and financing on a continual basis.

Tsinghua Professor Hu Angang has been involved in the development of China's contemporary Five-Year Plans. He detects a shift from planning economic growth and structural changes, to planning non-economic issues concerned with education, science and technology, environmental issues, the use of resources, and improving people's livelihoods.

Professor Hu describes modern planning as a system of public affairs governance. The planning system is visible to market players and therefore it also assists private sector entities to be more responsive to state planning priorities. The process has become more democratic, scientific and institutionalized. Hu explains that under China's modern planning system "the performance of governance is far higher not only than in the period of the planned economy, but also higher than in the mature market economies of Western countries."

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