About a week after the publication of the main lines of the 14e five-year plan and the Long-Term Goals to 2035, political and economic leaders from around the world met online and offline from March 20 to 22 for the 2021 China Development Forum to discuss the new development opportunities during this spring dialogue between China and the world.
The Chinese engine, the engine of the global economic recovery
In 2021, the world is full of expectations for an economic recovery. How will the Chinese economy, the only major global economy growing last year during the COVID-19 pandemic, achieve better and more sustainable growth under the 14e five-year plan?
In January and February 2021, China’s consumption, investment, imports and exports, as well as other major indicators, increased by more than 30% year-on-year. He Lifeng, director of the National Development and Reform Commission (CNDR), said China’s economy is currently operating with “sustained recovery and steady improvement,” showing strong economic resilience and development dynamics.
International institutions have also revised their forecasts for the Chinese economy upwards. Angel Gurría, secretary general of the OECD, estimated that global GDP growth is expected to rebound to 5.5% this year. China’s growth is expected to reach 7.8%, allowing for an even stronger recovery.
“Growth forms the basis, growth is the key, only through economic growth can all of China’s problems be solved,” said Lin Yifu, honorary director of the National Institute of Development of China. Peking University. Although the 14th Five-Year Plan does not set a specific growth target for the next five years, some indicators can be seen as signaling the country’s growth potential.
Many foreign guests at the Forum said that the main features of the 14e China’s five-year plan sent encouraging signals for high-quality development.
Axel van Trotsenburg, managing director of World Bank operations, noted that the new plan emphasizes consumption-based growth, thereby reducing the impact of external imbalances on economic development. “This will allow China to continue to be an important locomotive in the global economic recovery,” he said.
New opportunities in the Chinese market for international companies
Review of the main features of the 14e five-year plan highlights the importance given to the formation of a strong internal market and the construction of a new development model.
With a workforce of 900 million people, a middle class of over 400 million people and a GDP per capita exceeding $ 10,000 for the second year in a row, what will be the new development opportunities in the formidable market? Chinese interior?
“The middle-income group is continuously expanding, resulting in an increase in demand for innovative and high-quality products and services, this will be an important factor in China’s economic growth,” summarized Oliver Zipse, President of the board of directors of BMW and foreign chairman of the forum.
Bai Chong’en, dean of the School of Economics and Management at Tsinghua University, said the upscaling of the consumption structure in China has both improved the quality of the domestic market and to create opportunities for businesses around the world.
“China is on its way to becoming the world’s largest consumer market,” said David Taylor, Chairman, President and CEO of Procter & Gamble. He said China is the world’s largest skincare market and represents one-fifth of P & G’s global customers. “P&G will continue to expand its presence in China to better serve Chinese consumers,” he said.
Many multinational executives vigorously discussed the online education markets, digital economy and the elderly economy, highlighting the new vitality of Chinese consumption.
According to Vasant Narasimhan, CEO of Novartis, China wants to improve its health care system and advance disease prevention and health management to achieve the goal of “Healthy China by 2030”. which will allow the establishment of a dynamic third-age economy.
Multinationals have a unique pivotal role to play in the new development landscape. “We are ready to seize opportunities to improve the healthcare system, invest more in China and serve China and the world,” said Milind Pant, CEO of Amway.
Innovation, a determining factor for the economic future
The main lines of the 14e five-year plan suggest maintaining the centrality given to innovation in China’s modernization efforts.
“The focus on innovation will propel China towards a more sustainable and prosperous future, which will also be of great significance to the world,” said Roland Busch, CEO of Siemens AG.
“High-quality development and secure development should be supported by continuous innovation and strong protection of intellectual property rights,” said Han Xiucheng, director of the Intellectual Property Development Research Center, emphasizing the importance attached by China to the protection of IPRs.
Innovation is the driving force that will reshape the global economy. When it comes to disruptive innovations, Tesla CEO Elon Musk predicted that digital health technologies, self-driving cars and 3D networks of tunnels to solve traffic jams will be among those that will transform their related fields.
“Digital transformation is a big trend,” said Michael Spence, professor at New York University and winner of the Nobel Prize in economics, believing that the COVID-19 pandemic will have only accelerated the passage to the digital economy.
Steve Mollenkopf, CEO of Qualcomm, predicted that 5G will have an impact on the development of the future world “similar to the widespread use of electricity.” He sees exciting prospects for long-term cooperation between the United States and China around the evolution of digital technologies.
A green China to contribute to the sustainable development of the world
The 14the five-year plan presents a series of binding objectives aimed at promoting ecological development around China’s objectives in terms of peak CO2 emissions and carbon neutrality.
“This is a very important signal that China sends to the world, it shows its determination to reduce its CO2 emissions,” said Nicholas Stern, professor at the London School of Economics and Political Science. He expects China to accelerate its ecological transformation in the fields of energy, transport and agriculture, which will have a positive impact on the whole world.
Jean-Pascal Tricoire, CEO of Schneider Electric, said he looks forward to China meeting the green development goals of the 14th.e five-year plan, in which two key technologies, electrical digitization and ecological electrification, will play a disruptive role. “Increased cooperation in these new technologies will create jobs and opportunities for businesses in all countries,” he noted.
According to Zhang Lei, founder and CEO of Hillhouse Capital Group, the world is at the crossroads of the transition from a high carbon economy to a low carbon economy, and finally to a zero carbon economy. Achieving carbon neutrality in China will bring many new points of economic growth, quality jobs and innovation opportunities in sustainable sectors. “The promotion of carbon neutrality will also form the basis for long-term sustainable development for companies,” he said.
China’s opening up for mutually beneficial cooperation with the world
“Is the world still flat? Many ask him the question. Thomas Friedman, author of The World is Flat and columnist on international issues in the New York Times, responded in the forum that we are facing a new world today, but that it is still flat: we are no only interconnected, but also integrated with each other.
What changes has the promotion of openness within the framework of the 14e five-year plan bring it to China and the world, with the emphasis on “dual circulation”?
“We are promoting market connectivity, industrial integration, innovation and rule-making between China and the world,” said Qian Keming, vice minister of commerce. “China previously had a role of the world’s factory, it will play a more pronounced role as a world market in the future,” he said.
Last year, Chinese imports of consumer goods amounted to around 1.6 trillion yuan; the negative list of sectors closed to foreign investors has been further reduced; more than 400 regulations and standards incompatible with the law on foreign investment had been abolished by the end of 2020. China’s efforts to increase its openness are concrete.
“We are satisfied with the steps taken by China to widen its openness,” said Thomas Gottstein, Managing Director of Credit Suisse. He said foreign capital could more easily enter the insurance, capital management and bond sectors, among others.
China was the first country to ratify the Regional Comprehensive Economic Partnership (RCEP) agreement and promote the early signing of the China-EU investment agreement. It strives to build a wider “circle of friends” for economic and trade cooperation, and to expand its openness to the world in a spirit of mutual benefit.
“In a global landscape that pursues globalization and engages in connectivity, China’s policy of openness fits precisely in this spirit of openness to globalization, which sends positive signals to the whole world,” said Oliver Zipse.