It’s that time of year when China’s leaders pull out their best black suits, don sober white shirts and revolutionary red ties, and comb their dyed-black locks into left-side partings. Yes, folks, it’s National People’s Congress time!
Two things are guaranteed to happen at this year’s meeting of China’s national parliament. First, the standing committee of the Politburo – Hu Jintao, Wen Jiabao and the seven other identikit members of China’s supreme ruling body – will pose, serious and grim-faced, for People’s Daily photographers. Second, the supine legislators will rubberstamp the 12th Five-Year Plan, the central document in the country’s mysterious policy-making process.
We know the major themes of the new plan, which will run until 2015, because they were already approved last October at the annual meeting of the Party Congress. It advocates a gradual shift in China’s investment- and export-focused development model toward a greater concentration on household spending and consumption. Policy makers will no longer pursue growth for growth’s sake, but will concentrate more on the composition and quality of growth.
The annual GDP growth target will be pegged down a notch or two, and Beijing will promise to spend more on social welfare, encourage labor-intensive service industries, continue its energy-efficiency drive and attempt to shift industrial policy away from heavy industry toward new technology.
Officials from every level of China’s bureaucracy have been busy adding flesh to the bones of these guidelines over the past five months, so that a detailed “outline” of the five-year plan will be ready to present to the NPC’s 3,000 delegates. Many of these delegates spend the 10-day session in the Great Hall of the People enjoying a well-earned nap, but they will all be awake when the voting takes place.
By early March, then, we will know exactly what is planned for the next five years. But what exactly is a “five-year plan” today, and how seriously should we take it? After all, China is no longer a command economy ruled by input-output tables with prices set by central diktat.
The country’s earliest five-year plans in the 1950s were never as systematic as the minutely detailed plans of the former Soviet Union, with looser quotas and plenty of room for local decision-making. By the 1980s the focus had shifted from short-term box-ticking to long-term industry and investment planning. Now, the plans reflect the more market-based nature of China’s economy and are basically used to guide public policy.
Rather than a single document, the 12th Five-Year Plan actually consists of thousands of distinct but related plans issued at the provincial and city level, along with separate plans for regions, industries and special projects. Each province will have its own five-year plan, as will the steel industry and the project to boost incomes in China’s undeveloped western region.
Far from reflecting the unbending and singular will of Beijing, the plan is a culmination of five years of information gathering, policy analysis, evaluation and revaluation, with considerable input from outside experts.
China’s planning and policymaking process certainly has its failings, with too much emphasis on quantitative measures and targets rather than price signals. But what the five-year plan does do successfully is help to coordinate policy across 31 provinces and hundreds of agencies. Perhaps that’s not such a bad idea after all.
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