China Economy is Set to Explode

China Economy is Set to Explode

China is set to raise the curtain for the national gathering of one of the world’s largest political parties on Wednesday.

The 19th National Congress of the Communist Party of China (CPC) will “make new strategic arrangements for the country’s reform and development over the next five years and beyond,” Tuo Zhen, spokesman for the congress, said at a press conference Tuesday.

“It is an event of key importance as China embarks on a decisive stage of building a moderately prosperous society, and a crucial phase to develop socialism with Chinese characteristics,” Tuo said.

A total of 2,280 delegates will attend the twice-a-decade event. About one-third are selected from the country’s grassroots.

In many ways, the gathering will mark a milestone in the history of the CPC and China.

A new leadership – whose five-year term will extend beyond 2020 when the building of a moderately prosperous society is expected to be finished – will be elected, and the CPC Constitution will be amended, Tuo said.

The amendment will include key theories and strategic thoughts presented by a report to be delivered at the congress.

It will “fully represent the latest sinification of Marxism, as well as new governance concepts, thought and strategies proposed by the CPC Central Committee with Xi Jinping at its core since the 18th CPC National Congress, as well as new experience in adhering to and strengthening Party leadership and in strict Party governance,” Tuo said.

Discussion of Xi’s new governance concepts, thought and strategies is expected to make headlines throughout the event.

More importantly, delegates will pool wisdom on how to further develop socialism with Chinese characteristics. The phrase has been a familiar notion referred to repeatedly at previous CPC national congresses.

Many have attributed China’s ongoing economic success — if not miracle — to various factors including the Party leadership, innovation, a people-centered ideology, stability, infrastructural upgrading, and globalization, all of which could serve as an example for other economies.

This year the term will carry extra weight at the congress.

China has set 2020 as the target year to finish building a moderately prosperous society (Xiaokang), just one year before the CPC celebrates its 100th anniversary.

Two key components of the 2020 goal are to eradicate poverty nationwide, and to double the country’s GDP and per-capita income from 2010 levels.

By 2049 — the centenary of the founding of the People’s Republic of China — it should become a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious.

It will be the first time in history that over one billion people are lifted into modernity in such a short space of time.

Achieving these two centenary goals is key to taking the historic leap from standing-up, to becoming better-off, to getting stronger, and then realizing the Chinese Dream of national rejuvenation proposed by Xi in 2012.

Late Chinese leader Mao Zedong is commonly thought to have ended China’s century of humiliation at the hands of foreign aggressors by founding the People’s Republic of China in 1949.

Deng Xiaoping, the architect of China’s reform and opening up, is the leader who is said to have paved the way for the nation to become rich.

Now, it is President Xi’s task to blaze the way for the nation to become a strong power in the world. Under Xi, China is following its own path.

Addressing a workshop for high-ranking officials in late July, Xi called for “upholding the banner of socialism with Chinese characteristics on the road toward victory in building a well-off society and realizing the Chinese Dream of national rejuvenation.”

In the tone-setting speech ahead of the 19th CPC National Congress, Xi stressed confidence in the path, theory, system and culture of socialism with Chinese characteristics, which he called “the theme of all the Party’s theories and practices” since the reform and opening up started nearly forty years ago.

Xi’s constant referencing of socialism with Chinese characteristics points to his belief that the CPC has chosen the right path for China, as evident in the great leaps forward China has made over the past four decades.

The progress made over the past five years speaks volumes. China’s GDP expanded by an average annual rate of 7.2 percent between 2013 and 2016, compared to 4 percent growth in developing economies, and just 2.6 percent of global growth.

The economy is building stronger momentum with steady progress and growth, while major international institutions have revised up their growth forecasts for China.

Meanwhile, the number of people living in poverty dropped to 43.35 million at the end of 2016, from nearly 100 million at the end of 2012, according to Tuo, who hailed the “remarkable progress made in China’s fight against poverty.”

While some Western countries are stagnating and struggling, China remains a beacon of stability across the globe.

China’s great achievement in socialism with Chinese characteristics means not only that socialism has gained strong vitality in China, but also that it has inspired and expanded the path for modernization to developing countries throughout the world.

Calling China an “active participant and contributor to global economic governance,” Tuo Zhen told the press conference that China is working to push economic globalization toward being open, inclusive, balanced and beneficial to all.

“China is willing to shoulder more responsibilities and play a bigger role in safeguarding international peace and security, promoting global economic growth, and protecting the legitimate rights and interests of developing countries,” he said.

The Communist Party of China (CPC) has vowed to satisfy the people’s desire for “a better life” and written the idea into a key political document, as the latest assertion of the Party’s people-centered approach.

The Chinese phrase “mei hao sheng huo”, which can be translated as “a better life” or “a happy life”, appeared 14 times, including in both the opening section and the last paragraph, in a report given by Xi Jinping on Wednesday at the opening of the 19th CPC National Congress.

The report at the five-yearly congress is considered the most important political speech in China.

This year’s report said socialism with Chinese characteristics has entered a new era, and it draws up a two-stage development plan to build China into a “great modern socialist country” by mid-21st century, around the centennial of the founding of the People’s Republic of China.

One of the key messages from Xi’s report, a verdict on the principal issue facing Chinese society, has the word in it.

“What we now face is the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life,” Xi told more than 2,300 delegates from all walks of life attending the congress.

The needs to be met for the people to live a better life are increasingly broad, according to Xi.

Not only have their material and cultural needs grown, their demands for democracy, rule of law, fairness and justice, security, and a better environment are also increasing, he said.

It is not the first time that Xi has used the word “mei hao sheng huo.”

“To meet the people’s desire for a happy life is our mission,” Xi said when meeting the press after being elected general secretary of the CPC Central Committee in late 2012.

Xi’s statement was chimed later by the CPC’s repeated pledge for a “people-centered approach”, which is in line with the Party’s fundamental purpose of wholeheartedly serving the people.

Also five years ago, the residents’ per capita income was added into China’s economic growth target, but the Party is determined to take care of more than the people’s material needs.

It invested enormous efforts over past years into eliminating poverty, creating jobs and combating pollution in the world’s most populous nation.

More than 60 million people have been lifted out of poverty since 2012. During the same period, an average of over 13 million urban jobs were created each year.

A “Beautiful China” initiative has been launched. Xi’s quote, “Lucid waters and lush mountains are invaluable assets,” has struck home and been championed by many officials as well as ordinary people.

For years to come, the Party vows to develop socialist democracy, strengthen cultural soft power, continue to build a beautiful China, improve the people’s well-being and develop new approaches to social governance.

The CPC has announced it aims to see that socialist modernization is basically realized by 2035, and to develop China into “a great modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful” by mid-21st century.

By the end of the second stage, China will be “a global leader in terms of composite national strength and international influence” and the Chinese people will “enjoy happier, safer, and healthier lives.”

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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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