President Xi Jinping’s speech at the fourth plenum of the Communist Party’s Central Committee last month outlined the guidelines for the upcoming 15th five-year plan. There is clearly determination to focus on technological self-reliance, building an economic model of high-quality productive forces based on innovation and a strong industrial base that is resilient against external threats and headwinds.
At the Financial Street Forum in Beijing at the end of October, Vice-Premier He Lifeng stressed the need for China’s financial system to advance risk prevention, strengthen regulation and promote high-quality development. Since the 15th five-year plan time frame will be a key period for achieving socialist modernisation by 2035, a high-quality productive real economy model will require high-quality financial development, demanding an equally strong financial sector. The announcement that China would continue to open up its financial sector to foreign participation has been warmly welcomed.
During the forum, the country’s top financial leaders – including People’s Bank governor Pan Gongsheng, National Financial Regulatory Administration head Li Yunze and China Securities Regulatory Commission chairman Wu Qing – outlined measures to improve macroprudential regulation and make the financial system more inclusive and supportive of high-quality growth. They also emphasised appropriate risk management and financial stability.
The plenum communique clearly set out the guiding principles for the 15th five-year plan. The Communist Party is in charge of leading and implementation, pursuing high-quality development, comprehensively deepening reform and ensuring both development and security. The five-year plan will need to deliver a wide range of significant achievements in the country’s development.
To bring all these goals to fruition, the plan, which will only be fully published in March, had explanatory notes made public last week that GDP growth to 2035 would be around 4.17 per cent per year, slower than the 5.2-5.4 per cent growth rate achieved during the period of the 14th five-year plan. If this target is achieved, per-capita GDP by 2030 would be around US$20,000, roughly the mid-level of what the World Bank considers to be the level of advanced economies. Assuming that the population of China by 2030 is roughly 1.38 billion, the GDP by then would be almost US$28 trillion.
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China’s fourth plenum: party leaders call for boosting self-reliance against ‘raging storms’
China’s fourth plenum: party leaders call for boosting self-reliance against ‘raging storms’
The International Monetary Fund estimates that China’s gross domestic product in 2030 will be US$26.3 trillion and its GDP in purchasing power parity terms will be US$54 trillion. The fund estimates that the US’ GDP by 2030 will be US$36.8 trillion as will its GPD in PPP terms. Thus, while China’s GDP will be about 70 per cent of US GDP in 2030, in PPP terms, it will be about 46 per cent larger. China will be an economic powerhouse, requiring a substantially deeper and more resilient financial sector to support continued stable growth.
