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The Xi Decade: New Thought for the New Era 

Politics / China Oct 22, 2017 - 10:27 AM GMT

By: Dan_Steinbock

Politics In the Xi decade, Chinese transition to the post-industrial society will accelerate, despite the new normal in the world economy.
As the 19th National Congress of the Communist Party of China opened in Beijing, General Secretary Xi Jinping delivered a report about “building a moderately prosperous society” for a new era.

In his speech, Xi delivered a blueprint for China’s development for the next 5-15 years. In the process, he defined new thought for a new era.


Legacy of industrialization

In the 1980s, Deng Xiaoping launched the economic reforms and opening-up policies that created the foundation for Chinese revival. Jiang Zemin’s “Three Represents” opened the Party to more people, including business people. In turn, Hu Jintao’s “scientific development concept” sought to crystallize the key aspects of the quest for a harmonious society through development.

Nevertheless, these doctrines rested on the foundation of Deng’s legacy of industrialization, which had first been ignited in Mao’s 1950s and re-ignited with the 1960s “Four Modernizations” in agriculture, industry, defense as well as science and technology.

But it was Deng’s tough execution that finally enabled industrial revolution to take off in China, starting from the 1st-tier megacities in the coastal regions.

The progress has been stunning. In 1980, Chinese GDP per capita, adjusted to purchasing parity, was barely 2.5 percent of the U.S. per capita income. When Xi became CCP’s General Secretary in 2012, Chinese per capita income had increased tenfold to 23 percent of the US per capita income.

That was the old China of investment and net exports; China as the “world factory” of low costs and cheap prices. But it was also China of overcapacity and local debt; China that grew with foreign capital and domestic imitation, amid deep income polarization and great damage to the environment.

That would all change in the Xi era. From Deng to Hu, Chinese policies built on industrialization. In the Xi decade, these policies are driving transition to the post-industrial society.

Roadmap to post-industrial society

In the past half a decade, China has begun a massive rebalancing of the economy toward innovation and consumption. The new China is represented by rising costs and prices, but also by more indigenous innovation and premium domestic brands.

It is China of supply-side reforms and restructuring, painful but necessary transitions across industry sectors and geographic regions, particularly in the Northeast’s “Rust Belt.” It is China where excessive debt is no longer sanctioned and where deleveraging has begun.

In the Xi decade, development is not seen as a win-lose struggle between man and nature, but as a quest for an ecological civilization that China promotes through the Paris Accord – with or without the Trump administration.

In the new China, prosperity is no longer seen as the conspicuous privilege of few, but as the moderate goal for many. It is a nation in which the Chinese Dream means a moderately prosperous society and the eradication of poverty.

The new China is a strong sovereign state that will never again allow internal disintegration or foreign intrusions. That highlights the importance of the rule of law, and the struggle against corruption by both “tigers and flies” – the only effective way to put people first.

In Xi’s China, direct investment is no longer a foreign monopoly. Now Chinese capital is moving across borders and contributing to modernization not just in China and emerging Asia - but increasingly across the world.

China’s new international role

Internationally, the new China promotes more inclusive global governance creating institutions that look more like the world they pledge to serve. If the US-led Bretton Woods, Marshall Plan and North American Treaty Organization (NATO) defined the divisions of the Cold War; China promotes international cooperation, assistance and peaceful development in the 21st century.

Today, globalization proceeds through the One Belt and One Road (OBOR) initiative, supported by the BRICS New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB); multilateral development banks that represent the interests of emerging and developing nations – not just those of advanced economies.

As the new Xi roadmap will be executed across China, per capita income could climb to 35 percent of the US per capita income in 2022. In relative terms, that corresponds to US living standards in the early 1990s and those in Western Europe in late 90s. In advanced economies, such progress took two centuries; in China, just four decades.

That’s the China Xi envisioned in his speech last Wednesday. That’s his Chinese Dream – one that we all will know better by the early 2020s.

Dr Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more information, see http://www.differencegroup.net/

© 2017 Copyright Dan Steinbock - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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