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China Aims To Be More Resilient To External Economic Shocks

Oct 29, 2020
Originally published on October 29, 2020 7:28 am
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China plans its economy in five-year increments. And at the heart of its newest five-year plan, announced today, is an effort to make China more able to survive external economic shocks like, say, a pandemic or a trade war with the United States. Here's NPR's Emily Feng.

EMILY FENG, BYLINE: Earlier this month, Xi Jinping toured southern Guangdong province, echoing the historic southern tour reformist leader Deng Xiaoping made in 1992. Deng's message nearly 30 years ago was China needed to accelerate its economic opening up to the world. This time, Xi had his own more inward-facing message to deliver.

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PRESIDENT XI JINPING: (Through interpreter) We are witnessing major changes never seen in a century. We need to take the path towards indigenous innovation through self-reliance.

E FENG: As in China needs to double down on its own high-tech sectors, especially semiconductor chips. And it wants to boost domestic consumption so it's not so dependent on trade with other countries to drive economic growth. This self-reliance initiative is dubbed dual circulation and detailed this week at a meeting of 300 top Communist Party officials called the Fifth Plenum. Though growing domestic consumption is not going to be easy, Chucheng Feng, a partner at a Beijing research firm aptly named Plenum, explains that rising anti-China sentiment globally has pushed Beijing to at least try.

CHUCHENG FENG: China sees a growing external threat, a growing external pressure because of the protracted U.S.-China trade war, because European trying to push China on the 5G, on the innovation, because a lot of countries, for example, from the Five Eye nations like Australia, New Zealand - those will up the ante.

E FENG: Feng says China feels emboldened to tackle dual circulation because it feels it's met its goals from the last Fifth Plenum in 2015 - to eliminate poverty and pollution and to achieve sustainable economic growth.

C FENG: They want to have a clean slate in the beginning of the next five-year plan. We can move towards the innovation. We can move towards the upgrade of manufacturing. We can go up the value chain.

E FENG: But little else is known about what happened at the Fifth Plenum. Gatherings of the party's central committee are secretive proceedings behind closed doors. Feng, like many analysts of elite Chinese politics, has been watching tiny details, like the fact that this plenum was held on the same date as the last one five years ago, or that Xi Jinping visited Guangdong province but not, say, Hubei province.

C FENG: The party has this strong control over the media, over what's to be read, to be seen by the people, by the public. So everything you read, you see on the public sphere is a signal. It's a policy signal.

E FENG: China is signaling that it anticipates more American-led tariffs on its exports and more sanctions on its tech firms. It's also signaling it feels confident to meet those challenges head on. Emily Feng, NPR News, Beijing. Transcript provided by NPR, Copyright NPR.