New Stage, New Philosophy,New Pattern

The 5th Plenary Session of the 19th Communist Party of China (CPC) Central Committee adopted the CPC Central Committee’s Proposals for Formulating the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 (the Proposals). A "new development stage, new development philosophy and new development pattern" form the essence of the Proposals.

In our Thoughts on 14th Five-Year Plan issued in the first half of 2020, we identified key government issues during the 14th Five-Year period, which coincided with the Proposals. In this report, we provide a detailed interpretation of the 14th Five-Year Plan's dual circulation development pattern, with a view to helping enterprises explore new opportunities. The main points are:

• The Proposals demonstrate China's new development philosophy: The Proposals make it clear that the 14th Five-Year Plan period will be a "new stage of development", starting China's journey to building a socialist modern country in an all-around way following the construction of a moderately prosperous society. Centered on a new development philosophy of "innovation, coordination, green, openness", the Proposals ideate the long-range objective of basically realizing socialist modernization by 2035 in nine areas: national strength, the economic system, national governance, social civilization, ecological environment, opening-up, social construction, national security and people's livelihoods.
• Creating a new development pattern in the 14th Five-Year Plan period: Accelerating the creation of a new development pattern, wherein domestic and foreign markets can boost each other (dual circulation), but the domestic market is central, is key to the Proposals. The target is to achieve higher quality, more efficient, fairer, more sustainable and safer development
  • Domestic market central to new development pattern: The Proposals state that the domestic market will be central to the new development pattern featuring dual circulation. Expanding domestic demand and enhancing the role of final consumption in driving GDP will be vital.
  • Scientific and technological innovation are key: In this new era, scientific and technological innovation will be the main means, with digital technology and the digital economy important empowering tools, for China to drive high-quality development
  • High-level opening-up to provide further impetus: Through measures to further relax market access restrictions, facilitate trade and investment, and with a market as powerful as China's, China will hold huge appeal for the best global resources and production factors, making it a hotspot for foreign investment.
  • Guarantee of equality and sustainability:  To achieve the "common prosperity" envisioned in the Long-range Objectives, the 14th Five-Year Plan period will require a tighter focus on coordinated development, including addressing imbalances between urban and rural areas and among different regions. This makes promoting green and low-carbon production and lifestyles to achieve sustainable development a key mission.
• New development pattern will create more opportunities for enterprises: China's "dual circulation" economic pattern will help enterprises benefit from being part of a "world market" with enhanced quality and capacity. Meanwhile,  China's more robust industry chains, better business system and environment, and more active transnational and trans-regional cooperation will facilitate enterprises involvement in the transformation of the "world's factory". With its commitment to equitable and green development, China's new development philosophy will also create opportunities to promote corporate social responsibility.