China’s New Development Principle

By: Hu An’gang and Tang XiaoFrom:English Edition of Qiushi Journal July-September 2017|Vol.9,No.3,Issue No.32 | Updated: 2017-Sep-1 15:45
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At the Fifth Plenary Session of the 18th CPC Central Committee in 2015, the CPC introduced a development principle featuring innovation, coordination, sustainability, openness, and sharing. Formed on the basis of a thorough encapsulation of the experience of development at home and abroad, it brings to light the approach needed to realize development that is higher in quality, more efficient, more equitable, and more sustainable.

I. The new development principle: an intrinsically logical system

China’s new development principle is an intrinsically logical system, according to which, innovation gives development momentum; coordination gives it balance; sustainability allows it to endure; openness creates a connection between China and the rest of the world; and sharing gives it a clear goal. Interconnected and mutually reinforcing, these features have a unified goal – to further consolidate the Scientific Outlook on Development, and provide focus, guidance, and action to help China overcome difficulties, gather momentum, and cultivate strengths in development.

For a country to make a well-balanced plan for development, it requires integrating two facets: integrating national unity and local diversity; and integrating principled major national policy decisions and flexible creativity locally. After more than 60 years of practice, China has put in place a sound framework for national development, including systems for planning and implementation that are tiered and categorical, equitably divided, and complementary. Formulating and implementing plans for national economic and social development is an important institutional arrangement in national governance. From the First Five-Year Plan drawn in 1953 to the 13th Five-Year Plan (2016-20), each is a concretion of the principles and strategies guiding China’s development during that period. They reflect an ever deepening understanding of the laws of development and ever increasing capacity for governance. China’s plans for national economic and social development are divided into three administrative levels, namely national, provincial, and city and county, and three categories according to objective and function, namely general, dedicated, and regional. General national, provincial (including autonomous regions and municipalities directly under the central government), and city and county plans are formulated by the corresponding level of government, and implemented after approval from the people’s congress at that level. Dedicated plans are formulated by relevant government departments at all levels. Regional plans involving more than one province are formulated by the National Development and Reform Commission, together with relevant departments of the State Council and provincial governments.

The 13th Five-Year Plan is the grand blueprint for China’s economic and social development for its period of duration, serving as an important guide for the government to perform its duties of economic regulation, market supervision, social management, and public service. Core to this plan are the new development principles. Given China’s regional diversity and differences, the central government should be neither too strict nor too lax in implementing plans and setting targets for economic and social development. Rather, it should strike a balance between general plans and local realities, and give play to both central and local government initiatives. Where, then, do valid thoughts on development and governance come from, and how do we give full play to both central and local government initiatives? The solution is to set up and implement new, principled development.

Having an overarching, fundamental, and long-term bearing on China’s development, the new development principle represents a strategic program to guide China forward. It is a crystallization of the thinking, direction, and focus of China’s development for the present and the future. It guides the development of the nation, regions, organizations, and individuals. Only by accurately understanding its principles and by shoring up confidence in them can the government formulate sound development plans, clarify its strategic intentions, ascertain its priorities, and guide the actions of market entities. Only by upholding these new principles can the central government avoid the vicious cycle of management being abused when overly lax and ineffective when overly strict. It can both ensure the implementation of the central government’s empirical and rational thinking in local development and also avoid central government micromanagement of local affairs, to encourage enthusiasm, initiative, and creativity in local government.

An aerial view of the Beichangshan Island coastline in Changdao County, Shandong Province. PHOTO BY XINHUA REPORTER GUO XULEI

II. The 13th Five-Year Plan: implementing the new development principles

Considering the development and changes of each of the five-year plans, we see that they increasingly focus on setting development targets and dividing responsibilities between central and local governments. By combining obligatory and anticipatory indicators, they gradually reverse the tendency for local governments to conservatively and rigidly implement plans, encouraging them to expand their thinking on development under a unified objective, to thus clarify their priorities and duties. This comes from the CPC’s thorough understanding of the fundamental traits of this new stage of development and from the constant innovation and improvement of the concepts behind principled development. Therefore, fundamentally speaking, the new principles of development will bring about great strides in development.

China’s economic and social development already has its own logic, namely philosophy – plan (target) – action – measure. This pattern ensures that the new development principles are embodied in and guide the 13th Five-Year Plan. To implement the 13th Five-Year Plan, the central government first firmly establishes these principles, using them to lead the whole process including decision-making, implementation, and inspection. This makes the task more principled, systematic, predictable, and creative, and lays a conceptual foundation for coordination between all levels of government. Second, the government should stick to the goal of moderate prosperity throughout society while setting targets for economic development, innovation, public wellbeing, and resources and the environment during the 13th Five-Year Plan period. Of the 25 such targets, 13 are obligatory, being duties that the government must fulfill, functioning as mandatory restrictions for local governments and relevant departments. The rest are anticipatory targets that guide competitive areas and market entities. In accordance with the national five-year plan, all levels of government debate and amend their own five-year plans. Third, the government defines the means for realizing the targets. Major policies and projects are put forward after deliberations, to ensure their practicality and attention to detail; this guarantees the targets for building a moderately prosperous society are met. Fourth, the government lays out key measures for economic and social development, addresses pivotal problems, makes up for deficiencies, develops rich and systematic policies, and carries out work item by item. This way the new principles of development will become concrete efforts that can improve people’s lives and promote economic and social development.

The above-mentioned is an effective logical development. It is conducive to utilizing the window of important strategic opportunity for China’s development, to implementing the new development principles, and to adapting to, understanding, and guiding the new normal of economic development. According to our 2016 annual monitoring and assessment, of the 19 sub-items of the 13 obligatory targets, 18 made good progress, accounting for 94.7% of total items; and of the 14 sub-items of the 12 anticipatory targets, 13 are expected to reach target levels, accounting for 92.9%. This shows that the 13th Five-Year Plan has started well. Our empirical analyses of China’s 10th, 11th, and 12th five-year plans show that central and local governments’ development principles, targets, indicators, and tasks increasingly converged. The transformation of development principles is crucial. The analysis of the 13th Five-Year Plan shows that when local and central governments have similar development principles and targets, they make better progress in achieving their targets. All obligatory targets in the 13th Five-Year Plan are embodied in local plans and are non-negotiable for local governments.

III. Better implementing the new development principles

Fundamentally speaking, to better implement the new principles, the central government should unleash the enthusiasm, initiative, and creativity of the people, local governments, and relevant departments, and align their thoughts and actions with these principles. This will realize consistency of their principles, targets, motivation, and actions.

1. Allowing the new development principles to play a guiding role

Guiding the implementation of development plans, these principles serve not only as targets, but also as a program for achieving those targets. For instance, to promote local innovation, the central government should both leave local governments enough space for innovation, and form a nationwide effort in development. This will make innovative breakthroughs in key areas, thus spurring overall innovation-driven development. Reconceptualizing and rethinking development is a prerequisite for scientific development.

2. Setting development targets more scientifically

Local governments should set development targets judiciously and scientifically, respect the objective laws that govern development, give full consideration to the stage and realities of development, and avoid setting targets too high or too low. The central government should scientifically evaluate and give timely guidance to local governments on setting targets, encourage the participation of experts and the public, make targets flexible for different regions, and refrain from adopting a single target for all regions.

3. Making measures better coordinated

In implementing the new development principles, the central government should avoid a “silver bullet” approach. Development is not facilitated by a single factor. Rather, solving problems encountered during development requires comprehensive and systemic measures. Therefore, the central government should better coordinate relevant systems and policies. For example, the government should coordinate five-year plans with fiscal budgets, annual plans, and with the country’s overall, dedicated, and regional plans, forming an effective plan that is systematic and synergistic.

4. Making evaluation and supervision more strict and effective

Timely and effective incentives and punishments are conducive to pushing the implementation of the new development principles and the 13th Five-Year Plan. Given this, we should strengthen the Plan’s annual monitoring system and evaluate major indicators annually, so that annual targets are met. The central government should make incentives and punishments relevant to the core interests of localities, develop differentiated assessment mechanisms, and make performance appraisals more accurate and effective, ensuring the full implementation of incentives and punishments.

Hu An’gang and Tang Xiao are with the Center for China Studies at Tsinghua University.

(Originally appeared in People’s Daily,February 8, 2017)