Xi’s plan for China’s GDP to exceed that of the United States in ten years

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The President of China, Xi Jinping, kicked off a meeting in Beijing this week to map the next phase of economic development, days before the United States elections that will choose a president resistant to China’s rise, no matter who wins.

The country’s 14th five-year plan should focus on technological innovation, economic self-sufficiency and a cleaner environment. Communist Party officials will also set goals for the next 15 years, while Xi seeks to fulfill the promise for the country’s rejuvenation by gaining global leadership in technology and other strategic sectors. The meeting is closed to the press, and the main decisions are not expected to be released before the closing on Thursday.

If China’s economy – which is recovering quickly from the coronavirus shock – can maintain the growth path of recent years, should overtake the expansion of the United States in the next decade.

The prospect of increasingly deep confrontations with the United States underpins Xi’s strategy of accelerating plans to protect China from imbalances in the world economy.

“This reflects China’s realistic revaluation of the current global climate,” said Fred Hu, founder of Primavera Capital, a Beijing-based private equity fund. “Self-sufficiency means developing certain domestic capacities through investments in research and development and innovation, a necessary and prudent response to external uncertainties.”

“However, this does not mean that China will repudiate its old ‘open door’ policy and turn inward,” said Hu, who previously worked for the International Monetary Fund and led Goldman Sachs in China.

Xi and other officials recently insisted that the economy will further open the door to foreign capital and competition, reflecting concerns about how the world will perceive future plans. In a speech in Shenzhen this month, Xi promised to boost technological innovation, but softened the message by making it clear that he wants a “new open economic system”.

This desire to prevent the plans from becoming a new target in the country’s deteriorating relations with the United States and other commercial rivals may mean that the language around them is softened. An earlier strategy called Made in China 2025 it was abandoned after bothering trade officials in the Trump administration and creating unrest in Europe and other economies threatened by increased competition.

Growth target

The five-year plans have recently focused on industrial restructuring and maintaining a medium to high growth rate. State media reported that China is likely to reduce the GDP target in the next plan, as it shifts to high-quality growth. Although the deliberations will be announced after the meeting, the full text of the document will only be released at an annual parliamentary session in March.

Offering self-sufficiency while still benefiting from globalization – or “dual circulation”, as the dual objective is called by Chinese authorities – will be a challenge, as aggressive rhetoric towards China will persist, said Wang Tao, chief economist for China. China from UBS in Hong Kong.

“China faces a more challenging external development environment,” said the economist. “From now on, China has to be more ambitious in domestic reform and opening up. This is likely to intensify. ”

Source: Exame

The President of China, Xi Jinping, kicked off a meeting in Beijing this week to map the next phase of economic development, days before the United States elections that will choose a president resistant to China’s rise, no matter who wins.

The country’s 14th five-year plan should focus on technological innovation, economic self-sufficiency and a cleaner environment. Communist Party officials will also set goals for the next 15 years, while Xi seeks to fulfill the promise for the country’s rejuvenation by gaining global leadership in technology and other strategic sectors. The meeting is closed to the press, and the main decisions are not expected to be released before the closing on Thursday.

If China’s economy – which is recovering quickly from the coronavirus shock – can maintain the growth path of recent years, should overtake the expansion of the United States in the next decade.

The prospect of increasingly deep confrontations with the United States underpins Xi’s strategy of accelerating plans to protect China from imbalances in the world economy.

“This reflects China’s realistic revaluation of the current global climate,” said Fred Hu, founder of Primavera Capital, a Beijing-based private equity fund. “Self-sufficiency means developing certain domestic capacities through investments in research and development and innovation, a necessary and prudent response to external uncertainties.”

“However, this does not mean that China will repudiate its old ‘open door’ policy and turn inward,” said Hu, who previously worked for the International Monetary Fund and led Goldman Sachs in China.

Xi and other officials recently insisted that the economy will further open the door to foreign capital and competition, reflecting concerns about how the world will perceive future plans. In a speech in Shenzhen this month, Xi promised to boost technological innovation, but softened the message by making it clear that he wants a “new open economic system”.

This desire to prevent the plans from becoming a new target in the country’s deteriorating relations with the United States and other commercial rivals may mean that the language around them is softened. An earlier strategy called Made in China 2025 it was abandoned after bothering trade officials in the Trump administration and creating unrest in Europe and other economies threatened by increased competition.

Growth target

The five-year plans have recently focused on industrial restructuring and maintaining a medium to high growth rate. State media reported that China is likely to reduce the GDP target in the next plan, as it shifts to high-quality growth. Although the deliberations will be announced after the meeting, the full text of the document will only be released at an annual parliamentary session in March.

Offering self-sufficiency while still benefiting from globalization – or “dual circulation”, as the dual objective is called by Chinese authorities – will be a challenge, as aggressive rhetoric towards China will persist, said Wang Tao, chief economist for China. China from UBS in Hong Kong.

“China faces a more challenging external development environment,” said the economist. “From now on, China has to be more ambitious in domestic reform and opening up. This is likely to intensify. ”

Source: Exame

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