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Focus on new drivers of growth

Andrew Moody
Updated: Mar 4,2018 3:28 PM     China Daily

The main focus of the annual two sessions is usually the setting of the government’s growth target for the year ahead.

This comes in the Government’s Work Report, which this year will be delivered by Premier Li Keqiang in the Great Hall of the People on March 5.

With China expected to contribute 35 percent of global growth this year, according to the International Monetary Fund, this year’s figure is keenly awaited by financial markets around the world.

But this time, other aspects of the speech may receive even more attention.

Those observing and taking part in the annual plenary session of both the National People’s Congress, China’s highest legislature, and the National Committee of the Chinese People’s Political Consultative Conference, the top political advisory body, will be more preoccupied with what makes up that growth.

Achieving high-quality growth is one of the essential tasks of China’s new era in order for the country to meet its long-term goals to become a global technology leader by 2035 and to become a great modern socialist country by 2049 when the People’s Republic of China marks its 100th anniversary.

To do this, it has to tackle overcapacity and excess borrowing, reduce the income inequality between rural and urban dwellers and between regions, set up an adequate social safety net, deal with pollution, and tackle water scarcity and environmental degradation.

Not that the growth target in the Government Work Report is no longer important.

The figure set this year remains key to China achieving its central target of becoming a moderately prosperous society by 2020, in time for the 100th anniversary of the forming of the Communist Party of China the following year.

To do this it has to double the 2010 GDP per capita, for which it needs to grow by at least 6.2 percent this year and the two years following.

With China growing by 6.9 percent last year — higher than the target around 6.5 percent — it is currently more than on track.

In the context of what type of growth China needs, it is fitting that this year marks four decades since reform and opening-up began.

The period since 1978 has seen 700 million people lifted out of poverty, more than ever before in human history.

Former English prime minister Tony Blair described it as one of the “really significant” events of the late 20th century history in an interview with China Daily in January.

This was essentially China’s economic catch-up phase, however, and the anniversary reminds us it is time to move on to the next phase in China’s development, which might yet prove the most exciting of all.

Much progress has been made in the past five years in terms of supply-side reforms and reshaping China’s economic model away from being reliant on manufacturing exports and investment in its own infrastructure.

Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era is about taking China to a whole new level and also to a central position on the world stage.

One of the first steps on that journey will be 2020 when China will achieve a level of prosperity that will effectively mean it has escaped the middle-income trap that has befallen many developing countries, particularly those in Latin America.

By so doing it will take a position on the lower rungs of the high-income club of nations.

Many expected China to become stuck to its old growth model and so fail on this path, but the upgrading of China’s industry has been a major success in recent years.

Much of the country’s low tech manufacturing has gone offshore to Southeast Asia and elsewhere, including Africa, while it has been upgraded at home.

China is, in fact, making great strides in advanced manufacturing and robotics in line with its Made in China 2025 strategy.

On recent visits to Dalian in Liaoning province and Hefei in Anhui province, I witnessed huge energy, with the local government and science institutions really driving change on the ground.

The work, for example, by Chinese scientist Pan Jianwei in Hefei on the quantum internet could revolutionize future internet and telecommunications networks, meaning you never lose a signal on a mobile call, and so much more.

Philip Ball, the British science writer and author of The Water Kingdom: A Secret History of China, wrote in The Guardian in February that China was already emerging as a technology leader.

“The patronizing old idea that China, like the rest of Asia, can imitate but not innovate is certainly false now. In several scientific fields, China is starting to set the pace for others to follow,” he wrote.

High-quality growth, though, ultimately means delivering for the people whether they be in Beijing, Shanghai or Shenzhen or some of the more deprived areas in western China or the northeast.

It means generating the jobs for an increasingly educated workforce while also giving opportunities to those who have previously felt left behind.

It is also about providing adequate health and social care for everyone, and cleaning up the environment (the recent curbs on polluting factories in northern China being an example of that) so China is indeed “beautiful” for successor generations.

What will become evident at the two sessions is that China’s leadership now has the will, drive and determination to deliver on these objectives.