China to march toward modernization, set to overcome headwinds with institutional advantage

The 20th National Congress of the Communist Party of China (CPC) opened on October 16, after China had accomplished its first centenary goal of building a moderately prosperous society in all respects by 2021.

During the opening session, Xi Jinping, for the first time, outlined the connotation of Chinese modernization, laying out guiding principles for China's march toward its second centenary goal of building a modern socialist country by 2049. Against the backdrop of "high winds, choppy waters, and even dangerous storms," it is important to decipher what China's economic blueprint looks like when anchoring the overarching goal, how it will shape Chinese policymaking and what opportunities it will bring to development both at home and abroad.

For a world that is navigating its way through the fogs of escalating geopolitical tensions, runaway inflation, a raging COVID-19 pandemic, and potentially ruinous recession, the monumental convening of the 20th National Congress of the Communist Party of China (CPC), a twice-in-a-decade political gathering that opened in Beijing on Sunday, is set to disperse these mists and light up the road ahead. 

The world has been keenly observing the week-long event - which is seen as the axis of the development of socialism with Chinese characteristics in the new era - gauging how the triumphant gathering will spearhead the world's second-largest economy in the coming five years and longer vision, with earnest entrepreneurs, economists and politicians hoping that the Party Congress will be able to channel stability and give a much-needed shot in the arm to a floundering global economy.

In his two-hour opening speech on Sunday, Xi Jinping, for the first time, expounded on the connotation of Chinese modernization, a unique path that will guide China's policymaking in its march toward the second centennial goal of building the country into a great modern socialist country by 2049. 

Xi articulated a clear long-term blueprint to steer the economy, based on which the high-quality development was listed as the primary mission for achieving Chinese modernization. Emphasis was also placed on innovation and security of development, aiming to address concurrent downward pressures at home and abroad ranging from sluggish demand, a complex and turbulent international situation, US-led tech blocks against China and a growing "decoupling" push from the West.

After making the historic achievement in 2021 of building a moderately prosperous society in all aspects －the first centennial milestone development goal of the CPC － the new economic plan has been lavishly praised as a monumental culmination of China's startling economic miracle. It also marks the opening of a new milestone in the next five years, which Xi said will be "crucial for getting the efforts to build a modern socialist country in all respects off to a good start." 

There has been no shortage of predictions on how the Chinese economy will sail through these waters, with doomsayers peddling bearish views and hyping an economy on the brink of collapse. But the 20th CPC National Congress has sent a clear signal that China, flexing its institutional advantages and whole-of-nation approach, is destined to embark on a relentless battle to defy headwinds and create another miracle. 

The next five years will see the country climb up the value chain to center stage and embark on a firm trajectory to dethrone the US as the world's No.1 economy at around 2030.Its economic volume is forecast to be twice large as that of the US by 2050, with per capita GDP, at least, rising explosively to only second to that of the US.

More importantly, China's contribution to the world will expand beyond a one-third share of global economic growth. It will continue acting as the ballast of the global economy, and its role in globalization will evolve from a mere participant to a leader - a stark contrast to the unilateralism trumpeted by the US and Western countries - carrying broader implications for the global landscape.  

Focus on high-quality development

The tone-setting report laid out the direction where the Chinese economy is heading, under the strong leadership of CPC, in both the coming five years and the longer-term vision through 2035 and 2049. 

"From this day forward, the central task of the CPC will be to lead the Chinese people of all ethnic groups in a concerted effort to realize the Second Centenary Goal of building China into a great modern socialist country in all respects and to advance the rejuvenation of the Chinese nation on all fronts through a Chinese path to modernization," Xi said on Sunday in the report at the opening session of the 20th CPC National Congress.

A Chinese path to modernization is laid out in the report and its interpretation has been expounded for the first time. Xi said to build a modern socialist country in all respects, "we must, first and foremost, pursue high-quality development." 

Tian Yun, former vice director of the Beijing Economic Operation Association, told the Global Times that the economic focal points of the report are both a continuation and extension of the report delivered at the 19th CPC National Congress in 2017. But some details have been adjusted based on the Chinese leadership's "sober assessment" of the situation, taking into account the perilous external environment and multiple internal headwinds.

The report released in 2017 identified that China's economy had been transitioning from a phase of rapid growth to a stage of high-quality development.

"In the next five years, China will conspicuously inherit the high-quality development model. But the global situation has changed drastically from 2017, with Cold War mentality and geopolitical wrestling intensifying. So one of the key highlights of the latest Party Congress report is the central government's evaluation of the external environment and how it affects China's access to strategic opportunities and corresponding policymaking in strategic industries," Tian said. 

Warning of various "black swan" and "gray rhino" events that may occur at any time, the report urged the CPC members to "be more mindful of potential dangers, be prepared to deal with worst-case scenarios, and be ready to withstand high winds, choppy waters, and even dangerous storms."

An affirmation of the high-quality growth model in Sunday's report also shows that the Chinese economy is not likely to pursue lofty numerical targets in the coming years, but the development target could instead be interpreted through pragmatic and strategic economic indicators, observers said. 

"The current and the next five-year plans will be of great significance, not only for China but for the world as well. Therefore, the world… [will] follow the gathering and more operational activities in the coming years with great interest," Danilo Türk, former president of Slovenia, told the Global Times.

For the first time in the country's history of drawing up its five-year plans, China's 14th Five-Year Plan (2021-25) - widely regarded as a complete embodiment of the guiding principles of the 19th CPC National Congress - did not set a specific GDP growth target. 

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