Planning Ahead

While Chinese economic policy contains a degree of flexibility, the overall direction of its development is planned out via a system of 'Five-Year Plans'. This method, which have been in use since the Communist Party came to power in 1949, determines the economic aims and objectives of the government in a particular half-decade period, and sets out how these will be achieved. The PRC is currently in its 11th Five-Year Plan (FYP), with the twelfth due to start in 2011.

The current FYP has seen Hu Jintao's leadership team continue to oversee China's transition to a modern world superpower in line with Hu's own approach of 'scientific development'.  Deng Xiaoping's 'opening up' principle is still very much in favour in Beijing. Only a couple of weeks ago, Chinese Vice-Premier Xi Jinping was emphasising the need for further foreign investment in the PRC to facilitate increased economic growth. This will allow for more development for China's Special Economic Zones (SEZ) and other designated economic targets.

The next FYP will have an additional dynamic, in that it straddles a major leadership change that is due to occur in 2013. Thus, both current top officials and likely future leaders of the Communist Party will be seeking to have an input into the 12th FYP. At the moment, it does not seem that these interests are too far apart. Xi is tipped by many to be the probable successor to Hu Jintao, and the formers recent speeches and economic announcements demonstrate a strong intention to pick up where Hu and Wen Jiabao have left off. However, Xi's rise to the top is not guaranteed- a fact that is likely to generate at least some differences of opinion when politicians meet to discuss the course of the 12th FYP in the coming months.

A helpful reminder...

On Thursday 12^th August, the Xinhua New Agency reported comments written by Jia Qinglin (Chairman of the National Committee of the Chinese People's Political Consultative Conference) calling on non-Party political figures to back the Communist Party's “socialist core values system” for the development of Chinese socialism.

Formulated in 2006 at the 16^th Central Committee's 6^th Plenum, the system consists of (in the words of Xinhua) “Marxism, socialism with Chinese characteristics, patriotism, the spirit of reform and innovation and the socialist sense of honor and disgrace.” Beijing's need to re-iterate these core values of its political ideology, especially at a time when relations with China's other legal political parties seem to be good (as shown by the recent celebrations of the Chinese Peasant's and Worker's Democratic Party's 80^th anniversary in the Great Hall of the People), suggests a sense of growing uneasiness amongst the CCP's top leadership. As with the Imperial dynasties that preceded it, natural disasters pose a major challenge to the government's levels of popular support. With the ongoing flooding across China, particularly in Shaanxi and Gansu provinces, and the awful aftermath of these events, Jia Qinglin's remarks may be intended to serve as a reminder to the Chinese political landscape that the CCP remains the guiding hand for China's development in effect reaffirming its control. This is not to suggest that the Party is looking down the barrel of revolt against its rule, but governments often look at their weakest during times of environmental crisis. Certainly, the recent events in Pakistan demonstrate this.

Interestingly, the theme of the 'socialist sense of honor and disgrace' has been seen in the past week with several reports around corruption in official Chinese state media. After the People's Daily Online (English edition) featured findings that officials had received 5.4 trillion yuan in 'gray income' in 2009, with such income between 2005 and 2008 growing faster than China's Gross Domestic Product, this week saw He Guoqiang (China's anti-corruption chief) and Li Changchun speak out against corruption. Li Changchun also backed 'The Final Struggle', a new theatre play with a distinct anti-corruption message.

Of course, these latest in a long line of anti-corruption messages from the centre are not going to solve China's problem overnight. In a country as big as China, the inevitability of widespread corruption seems almost guaranteed. Since 1949, the many layers of government at the local, county and provincial levels has led to a proliferation of middle-men and, despite its reputation of ruling with a strong dictatorial fist, the CCP's reach only extends so far. In this sense, it is hard to see how China's great corruption 'issue' will be resolved. Whether it needs to be resolved is an altogether different argument.