China’s Communist Party recently approved the 13th Five-Year Plan, designed to guide the country’s social, political, and economic development through the second half of this decade. What is the significance of the plan? What are the main characteristics of the latest plan? And how should Chinese companies and foreign companies doing business in China respond?
China’s Five-Year Plan is a national strategy set by the country’s top leaders. Interestingly, it is not strictly a “plan,” in the sense of a precise sequence of actions leading to pre-determined goals. It sets out policies for social development and economic growth, identifies promising areas for investment, and indicates where governmental resources will be concentrated. It is intended not only to guide policy of all levels of government but also to influence strategy for state-owned and even private sector enterprises, while leaving room for them to take their own paths. In fact 11 private sector leaders, including Alibaba’s Jack Ma, were asked to give input to the plan. It provides an important window into the government policies which will shape the economy in the coming years.
While there are multiple changes in this Five-Year Plan compared to the previous one, they can be boiled down to four major themes.