Towards the 13th Five-Year Plan
- By Heiko Khoo
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E-mail China.org.cn, November 12, 2015
The economist Dr Oliver Melton explains that China's modern Five-Year Plan (FYP) is not a single unified plan, and it does not cover a precise five-year period.
"It is a dynamic institution for systematically bringing information up from the grassroots to the central government, processing and analyzing that information to support policy decisions, delegating and coordinating the implementation process across the bureaucracy, and then monitoring the effectiveness of those policies -- and the officials who implement them." (U.S.-China economic and security review commission hearing April 22, 2015)
The plan defines priorities and incentives for a wide range of ministries and local government agencies but it leaves significant scope for flexibility. This reduces the tendency to over-centralize and micro-manage - a characteristic of China's old planning system. Now, initial guidelines are finalized during an on-going cycle of plan development. This involves local agencies preparing hundreds of sub-plans that morph into concrete work and implementation programmes. These are executed by means of thousands of initiatives.
The first period of development and elaboration of the Five-Year Plan inevitably involves negotiation and plan bargaining between state entities at different levels, but this also fosters experimentation. Decisions are devolved to local agencies, which exercise a significant degree of autonomy.
One of the most challenging areas is industrial upgrading. Investment in cutting edge technology and R&D can be costly and risky. Emulation, and the application of existing technologies, can still offer rapid and low cost development solutions. And the incentives driving cadres to fulfil planning objectives mean that forced growth and excessive investment is a common response adopted to support local firms. But this may come at the expense of balanced development.
China's planning system is increasingly sophisticated and responsive, and it has proven capable of limiting the impact of the global capitalist crisis. The increasing importance of urban workers' consumption opens-up new avenues for participatory planning and quality control. The process of designing and monitoring state and local plans can inspire the workers and consumers to elaborate democratic and scientific plans for their workplace and community. In order to fully exploit the advantages of China's system, trade union members and workers' congresses should promote the grassroots democratization of planning to benefit their enterprises, their communities and society as a whole.
Heiko Khoo is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/heikokhoo.htm
Opinion articles reflect the views of their authors, not necessarily those of China.org.cn
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