11th Webinar - Looking at China’s Future through the Lens of the Five-Year Plan

Report by Ana Sánchez

In our eleventh webinar, we had the pleasure of hosting Francesca Ghiretti, a researcher in Asia studies at the International Affairs Institute (IAI), who is currently finishing a Ph.D. in Chinese foreign direct investment in the EU at King’s College London. On this occasion, the Co-founder and Vice-president of European Guanxi, Ilaria Tassari, was in charge of moderating the session.

The Five-Year Plan (henceforth FYP) will constitute the bedrock of China's economic and social development during the following five years. The 14th FYP, Francesca explained, will be a mixture of cautious and ambitious goals that will mainly look inwards, to China’s internal needs and welfare. This contrasts with the series of outward-looking investments that China has been pushing in the last few years.

According to Francesca, the reason for this apparently “modest” approach could be the need to content China’s internal public. In these times of uncertainty, Chinese people would demand stability and reassurance from their government. Therefore, setting goals that are hard to meet could pit public opinion against the government. Additionally, despite China’s resilience during the pandemic, we cannot forget that its economy is intertwined with that of other countries that are not coping so well with the sanitary crisis. This must, of course, be considered when laying out new goals.

Francesca continued by highlighting the focus of China on becoming self-sufficient, especially in the technological sector. The investments in this area range from AI and exploration of the Deep Sea to research in quantum physics and the creation of technological hubs. In order to meet this goal, investments will be coupled with a strategy to attract international talent from other parts of the world. This could be achieved by improving, for example, the living conditions of skilled foreign professionals in China. Francesca briefly referred to the point system for skilled expats that is established in Australia as a possible way of implementing this strategy.

In addition to what has been mentioned above, the ideal of self-sufficiency will also be applied to other areas, such as energy production -where China will bet on an increase in nuclear power- and food production. Similarly, in this line, there will be a push for national medium-sized companies and the development of internal industrial corridors within the BRI.

One of the points that had raised most expectations in the international community was China’s recent claims of wanting to play a leading role in the Green Transition. Nonetheless, the 14th FYP does not seem to be very ambitious in this matter, and continues in the line of the previous FYPs. In the Q&A section, Francesca pointed to the conflict between granting people a better quality of life - which in some cases would imply the urbanisation of rural areas- and greening the economy as the reason why China has not set clear goals regarding CO2 emissions.

Another expression of this more inwards-looking approach is the increase in protection in a broad sense. Since China has become a producer of intellectual property in recent years, it is possible to discern an interest in securing intellectual property through new regulations. In more traditional terms, China has increased the budget for defence by 6,8% -still far behind the US.

As one of the few claims related to external action, China has confirmed its intention to participate more actively in global governance and multipolarity.

The webinar concluded with a round of questions that touched on several topics, such as the impact of covid on some of these goals, the future of trade with China, the focus on quality versus quantity, among others. If you want to know all details and first-hand information about this webinar, check out the recording of the session on our YouTube channel.

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