China plenum to execute ‘new normal’ theory

The question for the time being is not whether China’s investment-driven growth story can realise a more sustainable shape, but whether it can do so without too much of in the way of an impact on global economic growth. In the absence of democracy, the five-year plans are the closest thing to an election manifesto for the Communist Party, laying out its longer-term priorities.

Xia Guang, director of the Policy Research Center for Environment and Economy at the Ministry of Environmental Protection, said the next five years will be a promising period when rapid improvement will be seen in environmental protection nationwide.

China reported 7.4% growth past year, an extension of slowing growth since 2011. But a 2-percentage-point drop in property investment growth during the third quarter and the 33.8% plunge in developers’ purchase of land between January and September indicate that the outlook in the property market remains pessimistic, the report said.

What they do is fill in a few details, occasionally amend areas of the plan, and figure out how they will implement it in their provinces and cities.

“The evidence of recent years shows that China is getting less and less real GDP growth for every yuan of credit created”, said Chovanec, previously an associate professor at Tsinghua University in Beijing.

Fund managers have been buying into companies including online retailers and consumer goods names in China, urging investors to look beyond the headline figures, which they say can be skewed.

Market consensus is that the GDP data indicates China has avoided a sharp slowdown.

There is a crude two-dimensional spaceship flying past, a giant child with an aviator’s hat and multicolored goggles, and four-person musical band riding on the roof of a bus – one sporting the lightning flash make-up worn by David Bowie on the cover of his Aladdin Sane album.

Like previous five-year plans, a GDP growth target is likely to be included. But Xi can’t ignore it if China is to ascend the value ladder and his leadership team has said publicly it wants “Made in China” to become “Innovated in China”.

Japan’s Nikkei 225 dropped 0.9 per cent to 18,777.04 and South Korea’s Kospi edged down 0.2 per cent to 2,044.65. This is Xi’s signature economic and geopolitical program, so expect more details to fill out the outline released by the NDRC in March.

The Volkswagen scandal and the poor news out of China took their toll on German businesses’ confidence, a survey from a leading think-tank revealed.

None of the discussion will be public.

With the right approach, the 13th Five-Year Plan can bring about significant improvements in the quality of market competition, government accountability, and the provision of public goods and services in China.