Unlocking the "Chinese Dream"
2 January 2018, written by Melanie Lee, Helena Powers
President Xi Jinping coined the phrase “Chinese Dream” shortly after he took office in 2012. Five years on, he has reiterated his vision for China to become a modernized socialist state by 2035 and a leading global power by 2050.
President Xi’s goal of doubling per capita GDP by 2020 (from the 2010 level) appears in sight. However, Chinese leaders have subtly de emphasized specific long-term growth targets beyond 2020, simply stressing the need for quality growth. CIO believes this ambiguity gives policymakers more scope for reforms.
An industrial upgrade and environmental protection are part of the government’s pursuit of quality and sustainable growth, and China’s eight million college graduates yearly are contributing to a demographic shift from labor quantity to quality. This should facilitate an industrial upgrade to skill-based, high-end manufacturing and innovation-based modern services, bolstering growth in the coming decades. CIO also expects environmental regulations to tighten.
Deeper state-owned enterprises (SOE) and supply-side reforms related to capacity reduction and deleveraging will be critical for China’s ongoing economic transition.
Some measures are already in place, but more needs to be done to address the structural imbalance and sustain growth. CIO foresees the scope of reform and deleveraging efforts broadening in 2018, expanding from coal and steel to other upstream sectors, from the financial industry to the real economy, and from SOEs to local governments and private sectors.
China is much more important to the world now than ever before. This increased importance stems not only from the size of its economy but also from its growing global influence. Political uncertainty in the US and Europe is also leaving a void in global leadership for China to fill. The One Belt One Road initiative, Xi’s strategic platform to project China as a responsible superpower, suggests greater involvement in shaping the current geopolitical environment.