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Implementing Five Development Concepts

2016-11-21

-- Preface to DRC Book Series 2016 By Li Wei, Research Fellow,President of DRC

The year of 2016 marks the first year of the 13th Five-Year Plan. The 13th Five-Year Plan period will be crucial to the future of China. Whether the goals of building a moderately prosperous society in all respects by the year 2020 can be achieved or not is not only an issue of development speed but also one whether China can seize the historical window period for development transformation, cross the middle-income trap and successively realize modernization.

In October 2015, the Fifth Plenary Session of the 18th CPC Central Committee adopted the Recommendations for the 13th Five-Year Plan for Economic and Social Development and set forth the concept of innovative, coordinated, green, open, and shared development. In March 2016, the Forth Session of the 12th National People’s Congress passed the 13th Five-Year Plan for Economic and Social Development, defined the general development principles in the new era and put forward the strategies for addressing the major challenges both at home and abroad.

Needless to say, China is facing a number of unprecedented difficulties and challenges in the course of economic and social development. For instance, the absolute number of working-age population is decreasing, the number of aging population is increasing, the overcapacity of traditional industries with low added value is severe, the ecological problems caused by extensive-mode of development are gradually emerging, and the innovation-driven new drivers have not formed, and people’s concern for social fairness and justice is becoming strong. But in the mean time, it should be objectively noted that China’s development has enormous potential and is hugely resilient with ample room for growth. The urbanization is far from being completed and there is a clear gap between under-developed and developed areas, which means that at present and for quite a long time in the future, there is a relatively large room for the development of investment and consumption. China boasts a complete industrial system, rich human resources, growing innovation capacity and a solid foundation and sound condition for future development. Currently, the downward trend of economic growth is only a short period in the course of economic transformation, and such an operable economic performance is under control. With the constant progress made in structural adjustment and economic transformation and based on the new development platform, China’s economy will realize a steady and sustainable development with a mid-to-high growth speed.

Given the fact that both favorable and unfavorable factors become interwoven and interacted with each other, it is held that the modernization of China has entered a historically important window period for transformation. If we fail to finish economic transformation during that period, we would not be able to cross the “middle-income trap” and modernization might stop halfway.

The CPC Central Committee is well aware of this fact and has made careful planning for economic transformation. In the next five years, in order to promote economic transformation and unleash new driving forces, we will follow the new development concept by continuously deepening reform and expanding opening-up and in line with the blueprint depicted in the 13th Five-Year Plan, formulate a development pattern in which balanced development is driven by innovation and coordination with harmonious development between men and nature, as well as further economic integration between Chinese economy and the world economy, and the achievements of development are shared by all the people.

Promoting economic transformation and upgrading and formulating a new development pattern require comprehensive measures from both the supply and demand sides. While appropriately expanding total demand, we need to focus on strengthening structural reform on supply side, changing development mode and enhancing economic transformation. China’s economic development is experiencing a historical turning point in which China has to deal simultaneously with the slowdown in economic growth, make structural adjustments and absorb the effects of previous economic stimulus policies. China is facing not only periodic and aggregate issues, but also tangible structural problems. With regard to the main contradictions between supply and demand, the major contradiction is on the supply side. For instance, with traditional growth drivers become weakened, new development forces are incapable of supporting mid-to-high growth; the industrial structure is featured by a resource-intensive mode and is not environment-friendly; the spatial flow of elements is not smooth, restricting urban-rural as well as regional coordinated development; foreign economic mechanism cannot totally become adaptable to the changes in international trade and investment rules. Therefore, the Central Government has vigorously pushed forward supply side reform since last year and paid much attention to the fulfillment of the five major tasks of cutting overcapacity and excess inventory, deleveraging, reducing costs and strengthening points of weakness. Through enhancing structural adjustment by reform, the government is striving to improve the adaptation of supply structure to the changes in demand structure, and enhance the quality and benefit of economic development. The 13th Five-Year Plan has also made the structural reform of supply side as the strategy and guideline. With the aim of promoting the better allocation and more efficient utilization of resources, improving production efficiency and optimizing supply side structure, the government has adopted measures to transform government functions, develop mixed ownership economy, strengthen market integration and transparent performance and improve economic regulation system so as to lay a solid material foundation for further development. It should be highlighted that laying emphasis on the supply-side structural reform does not mean that demand management is not needed. We will take measures such as perfecting the income distribution pattern and public service institutions to push forward the realization of social fairness and justice, provide powerful support to the domestic demand growth, and realize a sound interaction between supply and demand at a higher level.

Currently, the Development Research Center of the State Council (DRC) is actively promoting the pilot work of national high-end think tank construction in line with the requirement and planning of the CPC Central Committee and the Central Government, and trying to cultivate a world-class new think tank with Chinese characteristics. As a high-end think tank engaged in policy consultations and providing decision-making proposals to the CPC Central Committee and the Central Government, we will adhere to the principle of staying realistic and pragmatic as well as seeking truth from facts and bring forth new ideas while keeping a just and impartial stand. We will do our work well relating to policy research, policy interpretation, policy evaluation and international exchanges and cooperation. We will make due contribution to the promotion of China’s economic transformation and upgrading to a mid-to-high level and the realization of the goal of building a moderate prosperous society in all respects.

DRC Book Series 2016 has 20 volumes and they give a concentrated expression of our last year’s research findings covering 19 social and economic aspects. Among them, The Upgrading Strategy of Newly-Emerging Powers’ Competitiveness (Volume I and Volume II) and A Shift from Quantity to Quality in Terms of Pursuant Development are the major research reports of DRC; nine books such as Study on Perfecting Macro-Control Theories and Mechanism in the New Era, Regional Coordinated Development: Mechanism and Policies are the key research reports by various research departments of DRC; eight books are research reports based on bidding projects by senior experts and scholars and young researchers of DRC.

It has been seven years since the launching of DRC Book Series in 2010. Over the past seven years, we have gained recognition and popularity from dear readers and have been approved and encouraged by leading members from the CPC Central Committee, the Central Government and local governments of various levels. We would like to express our heartfelt thanks for their kind concern and warm support. In the mean time, we sincerely hope to receive more comments from dear readers to our work,which will help us to improve our work in constructing a national high-end think tank, rendering better service to the central authorities in terms of decision-making and promoting economic and social development of the country.

 
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