BEIJING- Chinese reform advocates are hoping President Xi Jinping’s proposed new economic model, expected to be the centerpiece of a key conclave next month, is an opportunity to quicken changes to spur domestic demand and tackle structural woes.
The new development model will be discussed at a meeting of the ruling Communist Party in October, where policies are expected to be built into the next five-year road-map for the economy, policy insiders said.
Xi in May proposed a “dual circulation” strategy for the next phase of economic development in which China will rely mainly on “domestic circulation” – an internal cycle of production, distribution and consumption.
That will be supported by “international circulation”, in which China further integrates with the global economy, opening its doors to more foreign goods, capital and investment.
As tensions between Washington and Beijing rise, the potential decoupling of the world’s two largest economies presents significant risks, a prospect that is firming China’s resolve to shift reliance to its own vast domestic market, policy insiders said.
The gathering of the Central Committee, the largest of the Communist Party’s elite decision-making bodies, will focus on the 2021-2025 plan for the country’s social and economic development. It will be the 14th such plan since China embarked on rapid industrialization under its first five-year plan in 1953-1957.
“It (dual circulation) will be a pivot of the 14th five-year plan. There will definitely be difficulties to make it work,” said a policy insider.
Guided by the new strategy, elements of the 2016-2020 plan, including supply-side reforms and policies to spur urbanization and innovation, are expected to be taken to the next level, the details of which will be unveiled at the annual parliamentary session next year.