Docking at the Land Of Prosperity

　　The 18th Communist Party of China Central Committee’s Fifth Plenary Session in late October charted the course for the country’s economic and social developmentover the next five years. The ruling Party’s proposal on China’s 13th Five-Year Plan (2016-20) adopted at the plenum reaffirmed the goal of building amoderately prosperous society by 2020. The proposed plan also put forward five focal points for China’s development： innovation-driven，balanced，green，openand universal. Columnists with Chinese media outlets have shared their views onthe plan. Excerpts follow：

　　Zhou Junsheng (www.gmw.cn)： The goal of building a moderately prosperous society in allrespects by 2020 was first established in 2002 and reiterated during the just concluded FifthPlenary Session. But it is a challenging goal. As China shifts from high-speed economic growth to a new normal of medium-high growth， itis facing pressure from a restructuring of theeconomy. This year’s third quarter GDP growthrate dropped below 7 percent. If the downwardtrend of economic growth continues in thenext five years， doubling the 2010 GDP and percapitaincome of rural and urban residents by2020 will be hard to achieve.

　　Meanwhile， measures such as investment and monetary expansion that are often employed to spur growth will have a limited effect.To combat these challenges，the fifth plenary session established the concept of striving for innovation-driven，balanced，green，open and universal development.

　　The five-pronged strategy will guide China’ssocial and economic development in the nextfive years. The five development concepts，systematically explained in the fifth plenary session’s communiqué， represent the lessonslearned since China introduced the reform and opening-up policy in the late 1970s as well asinnovations it has made in the country’s socialand economic governance systems in recentyears.

　　China has entered the countdown period for achieving a moderately prosperous societyin all respects. Results gained over the past 30years or so have provided a solid foundation.Nevertheless， problems remain. For example，vested interest groups formed in the earlyre form years are eating up the benefits ofeconomic and social development that should have been shared by all. To solve this， Chinaneeds to comprehensively deepen reform tobreak the vested interest groups that hinder social and economic progress， unleash marketvitality and maintain economic growth.

　　Ma Guangyuan (Nanfang MetropolisDaily)：The central goal of the proposed 13thFive-Year Plan is to complete building a moderately prosperous society in all respects by 2020.The key to achieving this goal lies in innovation.The fifth plenary session upholds developmentas the top priority，though the emphasis hasshifted to improving the quality and efficiency of growth. The meeting proposed five focalpoints with innovation-driven development topping the list. It’s impractical for China to continueits economic growth pattern driven simplyby investing and imitating other countries overthe next five years because such a path has hita glass ceiling.

　　Tyler Cowen， a professor at George Mason University in Virginia in the United States， statedin his book The Great Stagnation that the U.S.economy entered a stagnation period afterthe mid-1970s. He attributed the development to two causes： First， the disappearance ofthe “low-hanging fruit” that the United Stateshad enjoyed since the 17th century， such asfree land， immigrant labor and powerful new technologies. Second， the country reached a“technological plateau.” He holds that most in-ventions in the United States， such as electricity，cars， trains， planes， printers and cameras were created before 1940. Apart from the computer and the Internet， the country has had almost noepoch-making inventions since the 1940s.

　　As a matter of fact， the stagnation the United States faces is also relevant in China，which has gone through over 30 years of rapideconomic expansion. Currently， the traditionalgrowth engines， including the manufacturing sector， the demographic dividend， investment，real estate， exports and consumption， are losing momentum. The growth model which mimicsand aims to overtake the West has lost steam.China is left with only two options： makingbreakthroughs in development through innovation or falling into the middle-income trap.

　　However， we need to clarify what innovationis and how it should be done. The biggestmistake in the past was to equate innovationwith technological innovation. The fifth plenary session put forth the view of all-around innovation encompassing political theories，institutions， science， technology and culture，and it placed innovation of political theories and institutional innovation at a predominant position.This represents big perceptional progress.

　　Douglass C. North and Robert PaulThomas attribute the rise of the West toinstitutional arrangements in their book TheRise of the Western World： a New EconomicHistory. They point out that the UK hadpaved the way for the Industrial Revolution by developing modern fiscal， property rights，patent and financial systems. Institutions such as the Great Charter of 1215， which restrained royal power， the earliest patent system in human history that was put inplace in 1624， the first central bank in the world—the Bank of England—that was established in 1694， and the London Stock Exchange established in 1773 all served tolay an institutional foundation for technologicalprogress.

　　The fifth plenary session announced that the government would establish property rights，investment， financing， wealth distribution， talentcultivation and employment systems conduciveto innovation. This focus on institutional innovation echoes the UK’s institutional developmentbefore the Industrial Revolution and represents a more profound understanding of innovation.

　　The biggest obstacle for China in becomingan innovation-driven country doesn’t lie intechnology. China is a large exporter of hi-techproducts， though it still has a big gap to fill with more technologically advanced countries insome key and original technologies. The realconstraints are the institutions. For example，China doesn’t offer adequate protection forintellectual property， and its financial systemdoesn’t provide enough support for innovators.

　　Yan Yilong (People’s Daily OverseasEdition)：Overseas readers may be more concerned with what the 13th Five-Year Plan willdeliver to the world， particularly the concept ofopen development proposed during the fifthplenary session.

　　The concept symbolizes a major shift inChina’s global role. China will change its position from managing its own affairs to dealing withinternational matters with a global perspective.In the next five years， the Chinese economy will keep medium-high growth， which will beof great importance for the global economy.China will continue to create opportunities forthe world by assuming a more open， active，constructive and responsible role.

　　A more open China will provide greater investment opportunities for the rest of the world.Last year， foreign direct investment (FDI) toChina reached $129 billion， making the countrythe biggest FDI destination. Over the next fiveyears， China will fully implement the national treatment principle while specifying sectors offlimits to foreign investors in a “negative list” to facilitate foreign investment.

　　China will encourage its companies to havea global presence and inject new vitality to theworld economy. Last year， outbound direct investment reached over $100 billion and contracts for overseas projects amounted tonearly $200 billion. China will redouble its effortsto pursue the Belt and Road Initiative by promoting international industrial and equipment manufacturing cooperation in order to helpboost economic growth in countries involved inthe initiative.

　　China will push for the establishment of amore just and fairer global governance system.It will take a more active part in global economic governance and promote the formulation ofnew rules and mechanisms conducive to acooperative world economic order based onmultilateral cooperation.

　　The fifth plenary session made it clearthat China will be committed to shouldering international responsibilities， helping advance talks for confronting climate change and implementing the UN’s 2030 Agenda for Sustainable Development. In particular， it will take effective measures to peak carbon dioxide emissions by2030 in order to fulfill its emission reduction promises.

　　The coming five years will further prove that China’s peaceful rise is beneficial to the world，and a more powerful China will promote thelofty causes of peace and development.