Wu Li: China's Economic and Social Development Achievements During the "13th Five-Year Plan" Period Were Significant
General Secretary Xi Jinping noted while presiding over the meeting of the Standing Committee of the Political Bureau of the CPC Central Committee on October 22 to hear the summary and evaluation report on the implementation of the 13th Five-Year Plan: Since the 13th Five-Year Plan began, the Party Central Committee has united and led the entire Party, the military, and the people of all ethnic groups throughout the country to coordinately advance the Five-Sphere Integrated Plan and the Four Comprehensives. We have maintained the general work keynote of seeking progress while maintaining stability, unswervingly implemented the new development philosophy, persisted in taking supply-side structural reform as the main line, and promoted high-quality development. We have effectively and orderly resolved the contradictions and problems of unbalanced and inadequate development, calmly and composedly responded to a complex situation characterized by a significant rise in external challenges, and resolutely and decisively combated the severe impact of the COVID-19 pandemic. We have marched firmly toward the established goals and tasks. The implementation of the 13th Five-Year Plan has proceeded smoothly; major indicators will generally be achieved as scheduled, and major strategic tasks and 165 major engineering projects have been fully implemented with effective results. The various goals and tasks determined by the Plan are nearing victorious completion. The economic and social development achievements of the 13th Five-Year Plan period have provided a solid foundation for ensuring the realization of the struggle goal of building a moderately prosperous society in all respects and embarking on a new journey to fully build a modern socialist country.
Overall Stability in Economic Performance
Following the development during the 13th Five-Year Plan period, China’s economic strength, technological strength, and comprehensive national power [1] have leaped to new heights. Economic performance remained stable overall, the economic structure continued to optimize, and the new development philosophy has become more deeply rooted in the hearts of the people.
Economic and social development achieved all-around, groundbreaking historical accomplishments. Between 2016 and 2019, the Gross Domestic Product (GDP) maintained an average annual growth rate of 6.7%. In 2019, GDP reached 99.1 trillion yuan, accounting for 16% of the global economy, with a contribution rate to world economic growth of approximately 30%. It is estimated that by the end of the 13th Five-Year Plan period, GDP will exceed 100 trillion yuan. Per capita GDP has broken through the 10,000 USD mark. Due to the impact of the pandemic, GDP in the first quarter of 2020 fell by 6.8% year-on-year; however, it grew by 3.2% in the second quarter and 4.9% in the third quarter, resulting in a 0.7% year-on-year growth for the first three quarters. China has become the only major economy in the world to achieve positive economic growth over the same period since the outbreak of the COVID-19 pandemic. Other economic development goals have been well met: the target for the urbanization rate of the permanent population has been achieved ahead of expectations, and the targets for the urbanization rate of the registered household population [2] and total factor labor productivity are on track to be realized. China’s reform of the household registration system (hukou) has progressed smoothly with significant results. Data from the Ministry of Public Security shows that the task of granting residency to 100 million people was completed ahead of schedule, and over 100 million people migrating from the agricultural population have voluntarily and orderly achieved "citizenization" (shimin_hua). The urbanization rate of the registered population increased from 35.93% in 2013 to 44.38% in 2019. According to the latest news from the Ministry of Agriculture and Rural Affairs, a bumper autumn grain harvest is now certain, and annual grain production is expected to remain stable at the level of 1.3 trillion jin [3] for six consecutive years.
The construction of an innovative country has yielded fruitful results. Total R&D expenditure ranks second in the world; total labor productivity and the contribution rate of scientific and technological progress have steadily improved. The number of international patent applications submitted through the Patent Cooperation Treaty (PCT) has jumped to first in the world. A large number of major scientific and technological achievements have been achieved in fields such as manned spaceflight, lunar exploration projects, supercomputing, and quantum communication. The number of invention patents owned per 10,000 people met the target ahead of schedule. The contribution rate of scientific and technological progress reached 58.5% in 2018 and is expected to reach 60% in 2020.
Achievements in the struggle against poverty are world-renowned, and the living standards of the people have significantly improved. Goals for the growth of per capita disposable income, the number of new urban jobs, and the renovation of urban rundown areas (shantytowns) were all completed ahead of schedule. In 2019, the national per capita disposable income reached 30,733 yuan, an increase of 39.9% over 2015. From 2016 to 2019, cumulative new urban employment reached 53.78 million people, and the labor participation and employment rates have remained at high levels among major economies. From 2016 to 2019, construction began on a cumulative total of 21.57 million units in shantytown renovation projects. In 2019, the per capita housing floor area for urban and rural residents reached 39.8 square meters and 48.9 square meters, respectively. The rural poor population dropped from 55.75 million at the end of 2015 to 5.51 million at the end of 2019, with more than 10 million people lifted out of poverty each year. By the end of 2020, the goal of lifting all rural poor under the current standard out of poverty and removing the "poverty label" from all impoverished counties can be achieved as scheduled. The problem of absolute poverty, which has plagued the Chinese nation for thousands of years, will be resolved historically. In 2019, the consolidation rate of nine-year compulsory education reached 94.8%, and the gross enrollment rate for higher education exceeded 50%. The average life expectancy of residents reached 77.3 years, nearly 5 years higher than the global average.
Efforts in pollution prevention and control have increased with unprecedented intensity, and the ecological environment has significantly improved. Resource utilization efficiency has increased; the target for water consumption per 10,000 yuan of GDP was exceeded by a large margin. Targets for energy consumption per unit of GDP and the proportion of non-fossil energy in primary energy consumption are expected to be met. The forest coverage rate target is within reach, and air and water quality targets have already been significantly exceeded. The proportion of days with "good" or "excellent" air quality in 337 cities at the prefecture level and above nationwide was 82%, and the proportion of surface water reaching or exceeding Grade III quality [4] reached 74.9%.
Continuous Optimization of the Economic Structure
During the 13th Five-Year Plan period, China's economic structure continued to optimize. A new industrial structure and regional economic structure have begun to take shape. We have deeply advanced supply-side structural reform, comprehensively deepened reform and expanded opening up, and focused on promoting high-quality development, further enhancing the momentum and vitality of economic and social development.
Significant results have been achieved in cutting overcapacity in industries such as steel, coal, coal-fired power, cement, plate glass, and electrolytic aluminum. The national industrial capacity utilization rate has rebounded, the contradiction between supply and demand in these industries has eased, and operating conditions have improved, laying a foundation for the high-quality development of the manufacturing industry. Substantial results were achieved in capacity reduction in the steel and coal industries. From 2016 to 2018, the steel and coal industries reduced or eliminated 150 million tons and 810 million tons of backward capacity, respectively. More than 20 million kilowatts of backward coal-fired power units were eliminated or shut down, all completing the 13th Five-Year Plan capacity reduction targets ahead of schedule. According to the data from the Fourth National Economic Census released in 2019, compared with the results of the Third Census in 2013, there were a total of 2,556 industrial enterprises above designated size [5] involved in raw coal production at the end of 2018, a decrease of 47.7% from the end of 2013. Among them, there were 2,237 small-scale raw coal production enterprises with an annual output of less than 900,000 tons, a sharp decrease of 2,290 enterprises compared to 2013. The number of legal entities in the ferrous metal smelting and rolling processing industry was 22,000, down 42.0% from the end of 2013; the number of employees decreased by 47.5%, and its share of the total manufacturing industry dropped by 1.2 percentage points, making it the industry with the largest decline among major manufacturing categories. Capacity utilization rates in industries such as steel and coal also continued to rebound rapidly, gradually returning to a reasonable range.
Strict supervision promoted deleveraging and held the bottom line of preventing systemic financial risks. In April 2017, General Secretary Xi Jinping first proposed "financial security" during the 40th collective study session of the Political Bureau of the 18th CPC Central Committee. In July, the National Financial Work Conference was held, announcing the establishment of the Financial Stability and Development Committee under the State Council to strengthen financial supervision coordination and fill regulatory gaps. In December, the Central Economic Work Conference placed "preventing and defusing major risks" at the head of the Three Tough Battles [6] for the next three years. Under the guidance of top-level design, financial supervision was strengthened, the trend of capital "shifting from the real economy to the virtual" (tuo shi xiang xu) [7] was contained, and financial institutions began to return to their core business. Stricter restrictions were also placed on sectors characterized by "two highs and one surplus" (liang gao yi sheng) [8] and the real estate sector, forcing capital to shift toward industrial upgrading, the "three rural issues" (san nong), and small and micro-enterprises.
The "tough battle" to prevent and defuse major financial risks achieved phased results, and the rapid growth momentum of the macro leverage ratio was initially contained. In 2017, the macro leverage ratio rose by 2.4 percentage points; in 2018, it fell by 1.9 percentage points; and in 2019, it rose by 6.1 percentage points, with the leverage ratio of the real economy for the year at 245.4%. Despite the rebound, the increase in the leverage ratio in 2019 was reasonable, given the increased downward pressure on the economy caused by a significant rise in domestic and foreign risks and challenges, as well as the need for adjustment following the rapid pace of deleveraging in 2018. Furthermore, the 6 percentage point increase in the leverage ratio for the whole of 2019 was only half of the average annual increase from 2008 to 2016, and the cumulative increase in the last three quarters was only 1 percentage point, reflecting the determination and resolve to "stabilize leverage." Generally speaking, financial risks have gradually shifted from rapid accumulation in previous years to high-level mitigation, which also vacated significant policy space for China to respond to the COVID-19 pandemic and offset the economic downturn in 2020.
Accelerated Cultivation of New Drivers
While promoting the work of the "Three Reductions" [9], China’s "Three New Economies"—new industries, new formats, and new business models—have developed rapidly. To comprehensively monitor changes in the development of the emerging economy, the National Bureau of Statistics began to calculate and release the value-added of the "Three New" economies and the New Economic Momentum Index in 2018. From 2015 to 2019, the proportion of the "Three New" economy's value-added in GDP increased from 14.8% to 16.3%. Although the proportion of the "Three New" economy's value-added is still relatively low, its development momentum is vigorous, compensating to a certain extent for the impact brought by the weakening of traditional drivers and playing an important role in the steady operation of the economy. The New Economic Momentum Index shows that, with 2014 as the base of 100, the indices for 2015–2019 were 123.5, 156.7, 210.1, 270.3, and 332.0, respectively, maintaining a trend of continuous rapid growth. Among these, the five sub-indices—economic vitality, innovation-driven, network economy, transformation and upgrading, and knowledge capability—basically achieved varying degrees of improvement.
Manufacturing has steadily moved toward the medium-to-high end of the value chain. According to the Fourth National Economic Census data, at the end of 2018, there were 34,000 and 133,000 legal entities of high-tech and equipment manufacturing enterprises above designated size, representing increases of 24.8% and 12.2% respectively compared to the end of 2013; their total assets both grew by more than 50%, and their shares of operating income in total manufacturing above designated size increased by 4.0 and 4.5 percentage points respectively over 2013. The pace of labor and capital shifting toward advanced manufacturing, such as high-tech industries and equipment manufacturing, has accelerated. At the end of 2018, the proportion of employees in high-tech and equipment manufacturing in total manufacturing above designated size increased by 3 to 5 percentage points over 2013, and the proportion of total assets increased by 6 to 7 percentage points. Strategic emerging industries have accumulated and expanded, becoming a new engine for manufacturing development.
Emerging industries have shown good development momentum, and new drivers have continued to grow against the trend. In the first half of 2020, the value-added of strategic emerging industries above designated size increased by 2.9% year-on-year, and the value-added of high-tech manufacturing above designated size grew by 4.5% year-on-year, while the total value-added of all industrial enterprises above designated size fell by 1.3% over the same period. Operating income in related service industries led by new technologies maintained growth; from January to May, the operating income growth rates of high-tech services, scientific and technological services, and strategic emerging services above designated size were 4.7%, 4.0%, and 3.8% respectively, while the total operating income of all service industries above designated size fell by 6.4% year-on-year during the same period.
Opening up to the outside world has continued to expand, and the joint construction of the "Belt and Road" has yielded fruitful results. The joint construction of the "Belt and Road" has continued to deepen and become more substantive. Two Belt and Road Forums for International Cooperation were successfully held, and cooperation documents for the joint construction of the "Belt and Road" have been signed with 138 countries and 30 international organizations. In 2018 and 2019, two consecutive China International Import Expos were held. China has autonomously reduced tariff levels, promoting the formation of a "World Market" on top of China’s foundation as the "World Factory." Since 2018, China has increased the intensity of autonomous tax reductions. According to the China Opening and Development Report 2019 released by the Academy of the Ministry of Commerce, China's current trade-weighted average tariff rate is only 4.4%.
Indices of openness are not only significantly lower than those of other developing countries but also approach the levels of developed economies such as the European Union and the United States.
A transition has been effected from an openness based on the flow of goods and factors to an institutional openness [10] based on rules and standards. Since 2018, China has implemented a nationwide "negative list" system for foreign investment. Three successive editions of the Special Administrative Measures (Negative List) for Foreign Investment Access have been released. In the 2020 edition, the number of "restricted" and "prohibited" items was reduced to 33, a reduction of 30 items compared to the 2017 guidance catalogue. Within Pilot Free Trade Zones, the negative list system was implemented as early as 2013. During the 13th Five-Year Plan period, China successively released four editions of the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones, with items reduced from 190 in the 2013 edition to 30 in 2020—demonstrating a degree of openness even greater than the 33 items on the national negative list.
The construction of the legal system concerning foreign affairs has accelerated. In March 2019, the Foreign Investment Law of the People's Republic of China was deliberated and passed, taking effect on January 1, 2020. As the foundational law for China’s utilization of foreign capital in the New Era, the Foreign Investment Law established a management system of pre-establishment national treatment [11] plus a negative list for foreign investment. This constitutes another major institutional achievement in China's alignment with international standards to build a higher-level open economy.
Looking across the foreign economic relations of the 13th Five-Year Plan period, China maintained growth momentum in international trade and foreign direct investment. The development of foreign trade remained stable while improving in quality. In 2019, the total value of imports and exports of goods reached 31.54 trillion yuan, ranking first in the world. China is further advancing toward the goals of becoming a "world market" and an international investment hub.
The negative list system for market access has been implemented nationwide. In 2019, the National Development and Reform Commission and the Ministry of Commerce issued the Market Access Negative List (2019 Edition), which reduced the number of items by 20 compared to the 2018 edition. This list incorporates all national market access management measures previously found in documents such as the Guidance Catalogue for Industrial Structure Adjustment, the Catalogue of Investment Projects Subject to Government Ratification, and the Catalogue of Prohibited and Licensed Market Access for the Internet Industry. This ensures the authority and unity of "one list for the whole country," creating the conditions to clarify the boundary between the government and the market, stabilize the expectations of market entities, and stimulate the vitality of entrepreneurship and proactive action [12].
While relaxing access, mid-process and ex-post supervision have been strengthened. In 2016, a pilot program for the "three systems" of administrative law enforcement (the administrative enforcement disclosure system, the full-process recording system for enforcement, and the legal review system for major enforcement decisions) was launched. In 2019, these "three systems" were implemented comprehensively, playing a breakthrough role in promoting impartial law enforcement.
The achievements in China’s economic and social development during the 13th Five-Year Plan period are the result of the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core; the result of the scientific guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era; and the result of the united struggle, pioneering spirit, and enterprising efforts of the broad masses of the people. With the victory of building a moderately prosperous society in all respects [13] close at hand, the Central Committee—proceeding from national realities and the global situation while looking toward future development—has proposed a "new development paradigm with domestic circulation as the mainstay and domestic and international dual circulation promoting each other."
The 14th Five-Year Plan period will be the first five years in which China, having completed the building of a moderately prosperous society in all respects, embarks on a new journey to comprehensively build a modern socialist country. We must maintain a holistic view of the strategic project of the great rejuvenation of the Chinese nation and the world's profound changes unseen in a century [14]. We must profoundly understand the new characteristics and requirements brought about by the change in the principal contradiction in our society [15], and profoundly understand the new contradictions and challenges brought about by the complex international environment. We must persist in taking Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as our guide, strengthen the "Four Consciousnesses," [16] firm up the "Four Confidences," [17] and achieve the "Two Upholds." We must adhere to the new development philosophy, persist in high-quality development, remain people-centered, and make greater contributions to ensuring a good start and a steady first step in the comprehensive construction of a modern socialist country.