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The Orientation of China's Development in the Next Five Years
2015-11-13 08:02

(November 5, 2015)

President Siva Yam, Ladies and Gentlemen,

It’s my pleasure to join you at the 16th Annual US-China Trade Conference. First, I wish to extend my warmest congratulations to President Siva Yam and the US-China Chamber of Commerce for hosting this wonderful annual event, which, I am sure, like the previous ones, will be informative and successful.

Just one week ago, the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China concluded in Beijing and put forward a series of major guidelines on China’s social and economic development in the next 5 years.

There are many important messages we can learn from this conference on the future orientation of China’s development.

First of all, the conference emphasized more than ever the importance of promoting development driven by innovation.

It not only refers to the scientific and technological innovation, but also calls for innovation in all aspects of the government’s work as well as the relevant systems and mechanisms concerning the social and economic development.

To be more specific, the conference has made very clear its strong support for the development of new technologies, emerging industries and new types of businesses as well as for mass entrepreneurship and innovation. In line with this thinking, the conference stressed the importance of implementing such strategies as the national plans of Made in China 2025 aimed at upgrading the manufacturing sector, as well as Internet Plus and Big Data. The conference also asked for speeding up efforts in creating a market environment and relevant mechanisms favorable to promoting innovation-driven development. In addition, the conference mentioned the need to improve the macro economic regulation in a creative way.

Second, the conference emphasized the importance of coordinated and green development.

For the coordinated development, it means coordinating urban and rural development, development between regions as well as economic and social development. It also means promoting harmonized development of industrialization, IT application, urbanization and agricultural modernization.

For green development, it refers to sustainable development with focus on conservation of natural resources and environmental protection. The conference called for reinforcing the efforts to build a beautiful China, develop energy-efficient and low-carbon industries, adopt the strictest possible regulations on environmental protection and carry out in depth the action plan on the prevention and control of water, air and soil pollution.

Third, the conference emphasized the importance of development through further opening up.

The conference reaffirmed China’s determination to develop an open economy at an even higher level and participate more in global governance and trade so as to establish a far-ranging community of shared interests. The conference encouraged coastal areas to engage in more global trade and called for the establishment of more high-tech manufacturing bases and cross-border economic cooperation zones. Regarding the management model of investment, the conference decided to adopt a nationwide system of pre-establishment national treatment plus a negative list. The conference also agreed to expand the further opening up of the service sector in an orderly way and keep promoting the Belt and Road Initiative.

Last but not least, the conference emphasized the importance of promoting a development shared by all. Measures to be taken in this regard include extending old-age insurance to the full population, transferring some state-owned capital to augment the existing social security fund, establishing a more just and sustainable social security system, deepening reform of the medical system, as well as redoubling efforts in poverty alleviation. In addition, a new policy allowing all couples to have two children has been introduced.

To sum up, “innovation”, “coordination”, “green”, “opening up” and “shared by all” are the five key terms and expressions in understanding the future development of China, which will focus on improving the quality of economic growth, the quality of people’s life and the quality of natural environment.

The economic goal set by the conference is to maintain a medium-high growth speed and double China’s 2010 GDP and per capita income of the people by the year 2020 on the basis of making its development much more balanced, coordinated and sustainable.

In order to achieve the above mentioned goal, the minimum requirement for the average annual growth rate in the next five years is 6.5%. The Chinese government and the people will continue to work tirelessly to that end.

Due to the limited time, I am not able to cover all the aspects of the conference and present you with all the details. The full texts of the CPC Central Committee’s Proposal on Formulating the 13th Five-Year Plan on National Economic and Social Development, adopted at the Fifth Plenary Session of the 18th CPC Central Committee, has been released. I would like to advise you to have a little read, so that you will have a more detailed understanding of the Chinese government’s economic and social policies for the next five years.

China is now at the decisive final stage to build a moderately prosperous society in all respects. We are well aware that there will be problems and challenges ahead, but we are confident in the success of our agenda.

There have been too many pessimistic views on China’s economy recently.

You may still remember that when China’s stock market suffered a dramatic dive in mid-June, many observers regarded that as the beginning of a new financial crisis. Similarly, some observers even believed that the announcement by the Chinese government to reform the pricing mechanism for the value of Chinese currency yuan was the last tool available for China to save its economy.

When China began its efforts to stabilize the foreign exchange market, none of those observers thought China would be able to prevent a severe devaluation of its currency. And some of them even began to count how long it would take for China to use up its foreign reserve for that purpose.

However, there was neither financial crisis in China, nor severe devaluation of the Chinese currency as some observers had predicted. So far since mid-August when the new policy was introduced, the Chinese currency has been depreciated for only around 2%. China’s foreign reserve at the end of September was 3.51 trillion US dollars, which was only 43 billion US dollars less than the previous month.

By mentioning the above, I hope to emphasize that the problems in China’s current economy have been exaggerated by some of the media and academics here and elsewhere around the world.

As a matter of fact, China’s economic growth is steady in general. Although China’s economy continues to slow down, the slowdown itself has been slow, and many fundamental elements of the economy remain positive. In spite of weakness in certain economic sectors, some other sectors are still very strong and new growth points are emerging.

We firmly believe in the potential and resilience of the Chinese economy as well as the enormous dividends to be released through further deepening reforms. We also believe in the rich experience China has accumulated in managing its national economy. And we certainly don’t see any possibility of collapse, recession or stagnation in the foreseeable future.

In closing, I wish to say that since the Chinese economy is experiencing profound transition from the old growth model to a new one, it is critically important for foreign investors to monitor closely the changes taking place in China’s business environment and have an accurate understanding of the real situation there. It is particularly important to have an clear idea of the opportunities and challenges and readjust business strategies accordingly. I know many of you have rich experience in doing business with China, and I wish you more successes in future. Thank you.

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