China flags/FILE
The world’s second largest economy is riddled with structural inefficiencies and growth is at its slowest rate since the global financial crisis.
The meeting, called the Fifth Plenum, began in the wake of a series of disappointing economic figures prompting “increasing attention from observers both home and abroad”, the official Xinhua news agency said.
Five-Year Plans — it will be the 13th since the People’s Republic was founded in 1949 — are a holdover from the days before China embraced market reforms that have lifted hundreds of millions out of poverty.
But they still provide wide-ranging guidelines for managing the nation’s affairs, from the boardroom to the bedroom.
China is a key driver of the world economy and analysts have urged more and broader structural reforms to sustain its long-term expansion in the face of vested interests resisting change.
The ruling party’s legitimacy depends on projecting an aura of ultra-competence, but growth fell to 6.9 percent in the third quarter, according to official figures.
Leaders took another step towards loosening remaining communist-style economic reins Friday, with a surprise announcement that the People’s Bank of China was removing controls on what interest rates banks can pay savers.
At the same time it cut benchmark interest rates for the sixth time since November, and lowered the amount of money banks must keep in reserve, in an attempt to stimulate the economy and avoid a hard landing.
A weekend posting on a government website reported Premier Li Keqiang as saying authorities may let growth rates slip below the previous target of around seven percent.
“We never said we must defend any target to the death,” he said.
– ‘National rejuvenation’ –
China is entering a “key period of Chinese socialism as it trudges along the road of national rejuvenation”, the Communist Party mouthpiece, the People’s Daily, said in a commentary.
The dedicated focus on promoting growth has, among other problems, led leaders to ignore the effects of the country’s dependence on heavy industry powered by cheap but dirty coal.
That must change, according to an editorial in Monday’s China Daily, which is published by the government.
“The government should resort to energy restriction, particularly of coal, in order to press ahead with the transformation of the economic structure,” wrote Lin Boqiang, director of the China Center for Energy Economics Research.
Hu Angang, an economics professor at Tsinghua University, said bold environmental reforms cannot continue to have a lower priority than growth.
“We need to raise economic efficiency, but we need to raise environmental efficiency more,” said Hu, who was on an experts’ committee helping guide the planning process.
“We need to grow material investment, but we need to strengthen environmental investment more. We need to conserve energy, but we need to develop green energy more,” he told AFP.
Beijing is also considering loosening restrictions on its one-child policy, which has fuelled public discontent and which experts say is now raising demographic dilemmas.
After 205 members of the Central Committee, plus around 170 alternates, burnish the plan at the four-day plenum it is due to be formally approved by the rubber-stamp legislature next year.
More than half the Central Committee have changed jobs or been removed from their posts since they were appointed in 2012, according to a social media post by the Beijing Daily, the official newspaper of the capital’s Communist committee.
Many of the personnel switches are linked to a widespread anti-corruption drive under President Xi Jinping, which critics have compared to a political purge.
The Global Times, a newspaper with close ties to the government, said the “large-scale reshuffle is extremely rare” in the history of the party.
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