The Chinese Communist Party's fifth plenum concluded recently with economic policy commitments to "medium rapid" growth of 6.5 per cent, a climbdown from the earlier goal of "relatively fast" growth of seven per cent, suggesting the party is coming to terms with the slowdown in China's industrial sector. A detailed document outlining China's 13th Five-Year Plan will not be available till March but there are clear signals that the government is focusing on reducing inequality, green growth and lifting 70 million people out of poverty with an improved minimum wage and free secondary school education. People's Daily flagged the preeminence of environmental concerns in a social media leak ahead of the meeting, saying that the Plan would "maintain ecological civilisation." Indeed, China is committing to raising the share of non-fossil energy from 11.4 per cent in 2015 to 15 per cent in 2020. Expectations are high that the detailed Plan will outline programmes to clean up air and water and increase so-called green financing.
But the most dramatic statement from the plenum was the welcome and long overdue move to abandon the oppressive "one-child" policy after more than three decades. The policy left China with a rapidly aging population, and also empowered local government officials to terrorise women who had a second child and led to countless grotesque and forced late-cycle terminations of pregnancies. A large step for human rights certainly; though, in terms of turning around China's low birth rate of 1.2 per cent, the impact may not be felt for some time. In addition, in a trend also seen in China's East Asian neighbours such as Singapore and South Korea, it is becoming harder to convince middle-class Chinese urban women to marry, let alone have children. At most, the population's growth rate might rise to 1.4 per cent, which would mean China's population would likely peak in 2050 at 1.6 billion rather than in 2030 at a couple of hundred million less. Given the realities of a greying population, China is wisely targeting pension participation and health insurance for the entire adult population by 2020. China's aging population has been viewed as a weakness by many Indian observers who mistakenly believe this will allow India to take its place in the global manufacturing supply chain. However, China has also raised the productivity of its workers through training and better schooling - and is now focusing on innovation, services, industries like aerospace and the internet of things.
The fifth plenum made routine references to reforms; but it is notable that the plenum of two years ago made a much stronger case for them. President Xi Jinping remains a proponent of state-owned enterprises at heart and the market volatility of the past few months has made the leadership less inclined to free up the parts of the economy dominated by state-owned behemoths. For the foreseeable future, the world must accept that China's peculiarly capitalistic "socialism with Chinese characteristics" is not likely to become any more market-oriented than it is already.
