Leaders of the Communist Party of China led by Xi Jinping (center) raise their hands at the fifth plenary session of the 18th CPC Central Committee as the four-day annual meeting concluded in Beijing on Thursday. (Photo/Xinhua)
China will strive for "medium-high economic growth" in the next five years, with quality growth and innovation at the core of development, according to a communiqué released Thursday following a key meeting of the Communist Party of China (CPC).
Innovation has been stressed more heavily than ever in the five-year economic blueprint, an urgent solution to properly maintain economic growth amid the pressures of the continuing downturn, experts said.
Leaders of the CPC convened in Beijing from Monday to Thursday for the Fifth Plenary Session of the 18th CPC Central Committee to discuss an economic plan that will set the direction for the world's second-largest economy over the next five years.
They decided that China will aim to double its 2010 GDP and per-capita income of both urban and rural residents by 2020 by ensuring more balanced, inclusive and sustainable development.
In 2010, China's GDP was 40.9 trillion yuan ($6.4 trillion) and per capita income was 19,109 yuan for urban dwellers and 5,919 for rural residents.
Meanwhile, quality and efficient development has been prioritized in the 13th five-year plan (2016-20).
"Although the central government has restated its tolerance of lower economic growth, the target put forward in the latest communiqué indicates the grim economic situation and that maintaining economic development is still pivotal," said Zhao Xiao, a professor of economics at the University of Sciences and Technology Beijing.
The country's third quarter growth this year recorded 6.9 percent, according to data released on October 19, the lowest for several years.
Urgent restructure
Chinese authorities have repeatedly said they will not defend growth to a certain point, except to ensure the economy operates within a reasonable range, but it will be unacceptable for the government if GDP growth slides below 6.5 percent, Zhao said.
Therefore, it is urgent to restructure the economy, with innovation, consumption and service being paid great importance, when the economic situation is as bad as that of 2008, he said.
China will continue to encourage mass entrepreneurship in the hope that it will lead to new technology, the communiqué said.
Now that the economy cannot be driven purely by investment and demographic dividend, innovation is the most important and feasible way to boost growth, said Hu Xingdou, a professor at the Beijing Institute of Technology.
In addition, reforms of State-owned enterprises by encouraging development of private companies and less control over the market is also significant for restructuring the economy, Hu said.
The country will also promote greater sophistication in its industrial sector and significantly raise the contribution of consumption to economic growth. The urbanization ratio calculated based on the number of registered residents will also rise at a faster pace, the communiqué said.
Zhao said that bridging the urban-rural income gap and increasing middle class income is key to stimulating consumption.
Foreign investment
China will attract more foreign investors by being clearer on the rules that apply to them. At the meeting, leaders decided on nationwide adoption of the "negative list" model that clearly states sectors and businesses that are off limits to foreign investment.
This will help ensure protection of foreign investors' rights and better allocate their funding. The communiqué suggested the service sector be further opened to foreign investment and systems to promote service trade should be improved.
Recognizing the service sector's huge growth potential, China has taken gradual steps to accelerate its development, liberalizing the finance, education, culture and medical treatment sectors, it said.
In the five years from 2016, the country will develop an open economy at the higher level, and participate more in global governance and trade.
The government also pledged to deregulate pricing products and services in competitive sectors from 2016 to 2020, improve macroeconomic management and intensify targeted controls, said the communiqué.
