China to set new plan for troubled economy

Beijing, October 12

China’s Communist rulers will gather later this month, state media said today, to set a course for the world’s second-largest economy over the next five years, as slowing growth raises global concerns.

The Communist Party meeting, known as the Fifth Plenum, is expected to focus on structural reform and easing state control — although such moves have been repeatedly promised before.

The world’s most populous country has enjoyed a decades-long boom since the ruling party embraced market economics and opened up to the rest of the world from the late 1970s.

The process has transformed the livelihoods of hundreds of millions of people and propelled the country to global prominence.

But growth has been slowing for several years, and analysts say the party needs to embrace further liberalisation to avoid falling into the stagnation of the ‘middle income trap’, when developing countries fail to fulfil their full potential.

The Communist Party continues to issue regular economic guidance, including Five Year Plans and annual targets for the country’s growth.

The Fifth Plenum will be held from October 26 to 29, the official Xinhua news agency reported today, citing a statement from the Central Committee.

It will finalise the 13th Five Year Plan, which will start next year.

Under President Xi Jinping, who took power in 2012, the Communist Party has pledged to give markets a decisive role in the economy.

But large-scale interventions into the country’s falling stock market this summer have called into question the government’s willingness and ability to follow through.

Beijing has poured hundreds of billions of dollars into the market and cut interest rates, among other measures, following a rout that saw the Shanghai Composite Index plunge from a high of over 5,000 in mid-June to a low of just under 3,000 in August.

The ruling party has committed to making China a ‘moderately prosperous society’ by 2020, when the plan will complete, a goal that includes doubling per capita income for urban and rural residents from 2010 levels.

Continually rising prosperity is a key element of the Communist Party’s claim to legitimacy, but the target has seemed less and less achievable as China’s economy has slowed in recent years, weighed down by overcapacity and falling exports.

 Poverty eradication in six years

BEIJING: China hopes to lift all its 70 million living beneath the poverty line to safety within the next six years, at an average rate of a million people a month, a cabinet official said on Monday. “We have six years to eradicate all poverty,” said Hong Tianyun, deputy director of China’s State Council Leading Group Office of Poverty Alleviation and Development of China, on the government’s website. About 70 million people, mostly in the countryside, live beneath China’s poverty line, earning less than 2,300 yuan ($362) annually, the official Xinhua news agency reported last month, citing data from the National Bureau of Statistics. Hong added the short timeframe put pressure on local governments. — Reuters