The "Spirit" of the 5th Plenum 五中全会精神

New Development Stage, Philosophy, and Paradigm 新发展阶段，新发展理念，新发展格局

Almost every year, the Central Committee of the Communist Party of China (CPC) holds a plenary session in autumn - November or October. After the plenary session, the 精神 “spirit” of that plenary session becomes the highlight and dominating theme of Chinese politics.

Until the next plenary session, every major official speech, document, and meeting at every level of the Party and the Chinese government begins with 学习贯彻 “study and implement” the spirit. Official newspapers, TV stations, and Internet sites set up special columns for that.

It’s not just the form, but also the substance. The spirit will guide the Party and government work for at least a year and become part of the philosophy and principles that shape policy-making, as well as translate into concrete policies outright.

If that has yet to convince you to spend time sorting out the “spirit” that you may have considered obscure, rigid, or ritualistic, consider doing so from a practical sense: just a few days ago, on Feb. 20, the leading officials at the Ministry of Commerce gathered to study (CHN) what is detailed in this newsletter. Other ministries and provinces have also done the same. In case you or your clients have business before them, it may be helpful if you can engage them in the language that they have studied and are familiar with.

The last plenary session the Party held was the Fifth Plenary session of the 19th Central Committee in November 2020. Following that, all levels of the Party and government, as the cliche goes, 掀起了学习贯彻十九届五中全会精神热潮 sets off a wave of studying and implementing the spirit of the Fifth Plenary Session of the 19th Central Committee.

So, what is the spirit of the fifth plenary session?

新华社北京1月11日电 省部级主要领导干部学习贯彻党的十九届五中全会精神专题研讨班11日上午在中央党校（国家行政学院）开班。中共中央总书记、国家主席、中央军委主席习近平在开班式上发表重要讲话强调，进入新发展阶段、贯彻新发展理念、构建新发展格局，是由我国经济社会发展的理论逻辑、历史逻辑、现实逻辑决定的。进入新发展阶段明确了我国发展的历史方位，贯彻新发展理念明确了我国现代化建设的指导原则，构建新发展格局明确了我国经济现代化的路径选择。要深入学习、坚决贯彻党的十九届五中全会精神，准确把握新发展阶段，深入贯彻新发展理念，加快构建新发展格局，推动“十四五”时期高质量发展，确保全面建设社会主义现代化国家开好局、起好步。

BEIJING, Jan. 11 (Xinhua) -- A class for major leading cadres at the provincial and ministerial levels dedicated to study and implement the spirit of the Fifth Plenary Session of the 19th Party Central Committee began on the morning of Jan. 11 at the Central Party School (Chinese Academy of Governance). Xi Jinping, General Secretary of the Communist Party of China (CPC) Central Committee, Chinese President and chairman of the Central Military Commission delivered an important speech at the opening ceremony, emphasizing that entering a new development stage, applying the new development philosophy, and fostering a new development paradigm are determined by the theoretical, historical, and practical logic of China's economic and social development. Entering a new development stage has clearly defined the historical orientation of China's development, applying the new development philosophy has clearly defined the guiding principles of China's modernization, and fostering the new development paradigm has clearly defined the path of China's economic modernization options. (We shall) study in-depth and resolutely implement the spirit of the Fifth Plenary Session of the 19th CPC Central Committee, accurately grasp the new development stage, implement in-depth of the new development philosophy, accelerate the fostering of a new development paradigm, promote high-quality development in "14th Five-Year Plan" period, to ensure that the comprehensive building of a modern socialist country has a good start, and takes a solid first step.

In a class dedicated to studying and implementing the spirit of the fifth plenary attended by major cadres and officials at the provincial and ministerial levels, the General Secretary highlighted the 新发展阶段 new development stage, 新发展理念 new development philosophy, and 新发展格局 new development paradigm.

Some side notes:

1)省部级主要领导干部 means they are the Party and administrative heads of provinces, autonomous regions and municipalities, namely Party Secretaries and Governors, as well Party Secretaries and Ministers of central Party and government departments.

2) Central Party School and the Chinese Academy of Governance used to be two different institutions. But they merged into one single institution in 2018.

3) Since 2013, this has become almost routine for 省部级主要领导干部 major cadres and officials at the provincial and ministerial levels to be enrolled into a class at the beginning of the year - January and February - to study and implement the spirit of last year’s Plenary Session (in four out of every five years) or Party National Congress (once every five years), with two exceptions:

a) There was no such class in the year of the COVID-19, for obvious reasons;

b) The theme of the class in 2019 was 坚持底线思维着力防范化解重大风险 (CHN) adhere to bottom-line thinking and endeavor to prevent and resolve major risks (ENG via Xinhua).

4) Deputy/Vice Party Secretaries/Governors/Ministers are NOT in the class, because of the word 主要 major.

Now let’s go through the 三新 three new(s) one by one.

***

新发展阶段 new development stage

What is the new development stage? What is new? What’s the old stage?

(continuing with the Jan. 11 readout of the class, via Xinhua in Chinese, in English)

习近平指出，正确认识党和人民事业所处的历史方位和发展阶段，是我们党明确阶段性中心任务、制定路线方针政策的根本依据，也是我们党领导革命、建设、改革不断取得胜利的重要经验。党的十九届五中全会提出，全面建成小康社会、实现第一个百年奋斗目标之后，我们要乘势而上开启全面建设社会主义现代化国家新征程、向第二个百年奋斗目标进军，这标志着我国进入了一个新发展阶段。作出这样的战略判断，有着深刻的依据。新发展阶段是社会主义初级阶段中的一个阶段，同时是其中经过几十年积累、站到了新的起点上的一个阶段。新发展阶段是我们党带领人民迎来从站起来、富起来到强起来历史性跨越的新阶段。经过新中国成立以来特别是改革开放40多年的不懈奋斗，我们已经拥有开启新征程、实现新的更高目标的雄厚物质基础。新中国成立不久，我们党就提出建设社会主义现代化国家的目标，未来30年将是我们完成这个历史宏愿的新发展阶段。

Xi Jinping pointed out that a correct understanding of the Party and the people's cause in the historical orientation and development stage is the fundamental basis for the Party to clarify its main task within a period of time and to formulate line, principles, and policies, and is also an important experience/reason from our Party's continuous success in its leadership of the (Chinese) revolution, construction, and reform. The Fifth Plenary Session of the 19th Central Committee proposed that after building a moderately prosperous society and achieving the first centennial goal, we should ride on the momentum to start a new journey of building a modern socialist country and march towards the second centennial goal, which marks a new stage of development for China. Such a strategic judgment has a profound basis. The new development stage is a stage in the primary stage of socialism, and at the same time a stage in which after decades of accumulation, stands to a new starting point. The new development stage is a new stage in which our Party leads the people to usher in a historic leap from standing up, getting rich to getting strong. After more than 40 years of unremitting struggle since the founding of New China, especially the reform and opening up, we already have a strong material foundation to start a new journey and achieve new and higher goals. Soon after the founding of New China, our Party put forward the goal of building a socialist modern country, and the next 30 years will be a new stage of development for us to accomplish this historical ambition.

A lot to unpack here, but first thing first: the new development stage is the next 30 years, from 2021 to 2049.

As Xi mentioned, it is in fact the period between China’s two centennial goals - what are China's two centennial goals?

The first: by 2021, to celebrate the 1921-founded CPC's centenary, the goal is to 全面建成小康社会 "build a moderately prosperous society in all respects."

The second: by 2049, the centenary of the 1949-founded People's Republic of China, the goal is to 建成富强民主文明和谐美丽的社会主义现代化强国 "build a modern socialist country that is prosperous, strong, democratic, culturally advanced, harmonious and beautiful."

Why are these 30 years considered a new development stage?

Because, according to Xi, After more than 40 years of unremitting struggle since the founding of New China, especially the reform and opening up, we already have a strong material foundation to start a new journey and achieve new and higher goals.

Since this is new, what is, at least comparatively speaking, old?

The new development stage is a stage in the primary stage of socialism, and at the same time a stage in which after decades of accumulation, stands to a new starting point.

Some history and ideology lessons here. The primary stage of socialism, in Chinese 社会主义初级阶段, is recognized in China as put forward by late Chinese leader Deng Xiaoping.

Basically, Deng’s leadership over China marked a turning point - from class struggles to economic development (reform and opening up), and one of the major reasons for the pivot was the recognition that China was underdeveloped and the Chinese people were poor, despite the Chinese society *is* a socialist society - hence the primary stage of socialism, or the initial/beginning chapters/years of socialism.

While China was in the primary stage of socialism, as it has always been stated, the main task of the Party/country/society is to develop the economy.

So, basically, the new stage, also part of the primary stage of socialism, is contrasted with an unwritten old stage of the primary stage of socialism. The term new stage does not point to a deviation from (all the policies associated with) the primary stage of socialism but suggests Beijing now considers China, despite still in the primary stage of socialism, is indeed different.

To put it in a perhaps oversimplistic way: China remains underdeveloped, but not that underdeveloped; it’s still poor, but not that poor, as explained:

经过新中国成立以来特别是改革开放40多年的不懈奋斗，我们已经拥有开启新征程、实现新的更高目标的雄厚物质基础。

After more than 40 years of unremitting struggle since the founding of New China, especially the reform and opening up, we already have a strong material foundation to start a new journey and achieve new and higher goals.

(continuing with the Jan. 11 readout of the class, via Xinhua in Chinese, in English)

习近平强调，新发展阶段是我国社会主义发展进程中的一个重要阶段。社会主义初级阶段不是一个静态、一成不变、停滞不前的阶段，也不是一个自发、被动、不用费多大气力自然而然就可以跨过的阶段，而是一个动态、积极有为、始终洋溢着蓬勃生机活力的过程，是一个阶梯式递进、不断发展进步、日益接近质的飞跃的量的积累和发展变化的过程。全面建设社会主义现代化国家、基本实现社会主义现代化，既是社会主义初级阶段我国发展的要求，也是我国社会主义从初级阶段向更高阶段迈进的要求。

Xi Jinping stressed that the new development stage is an important stage in the development process of socialism in China. The primary stage of socialism is not a static, unchanging, stagnant stage, nor is it a spontaneous, passive, without-much-effort-can-naturally-cross stage, but a dynamic, active process always overflowing with vigor and vitality. It is a process marked by step-by-step progression, continuous developing and progressing, and quantitative changes increasingly nearing qualitative. The comprehensive building of a modernized socialist country and the basic realization of socialist modernization are not only the requirements of China's development at the primary stage of socialism, but also the requirements of China's socialism moving from the primary stage to a higher stage.

Your Pekingnologist is not entirely sure, but it could mean that everyone has to work hard to realize development and change, in the new development stage. Xi has always stressed the importance of hard work, as contrasted with laziness and inaction. And he has always prized and been proud of hard work, saying this in 2018 when celebrating the 40 years of China’s reform and opening-up:

40年来取得的成就不是天上掉下来的，更不是别人恩赐施舍的，而是全党全国各族人民用勤劳、智慧、勇气干出来的

The achievements in the past 40 years have not fallen from the sky, nor have they been donated or bestowed by others. Instead, it comes from the hardwork, wisdom, and courage of the whole party, the whole nation and the people of all nationalities.

***

新发展理念 new development philosophy is in fact pretty straightforward: 创新、协调、绿色、开放、共享, innovative, coordinated, green, open and shared (development).

According to the readout of the Jan. 11 speech, Xi didn’t elaborate on their definitions, probably because they have been exhaustively detailed before, for example in his speech to the class for major leading cadres at the provincial and ministerial levels (CHN) in January 2016:

创新 INNOVATIVE

虽然我国经济总量跃居世界第二，但大而不强、臃肿虚胖体弱问题相当突出，主要体现在创新能力不强，这是我国这个经济大块头的“阿喀琉斯之踵”。

………

经过多年努力，我国科技整体水平有了明显提高，正处在从量的增长向质的提升转变的重要时期，一些重要领域跻身世界先进行列。但是，总体上看，我国关键核心技术受制于人的局面尚未根本改变，创造新产业、引领未来发展的科技储备远远不够，产业还处于全球价值链中低端，军事、安全领域高技术方面同发达国家仍有较大差距。

Although our country’s economic output has leaped to the second largest in the world, but the promblem of being big but not strong, and being bloated, fat, and remains quite prominent. It is mainly reflected in unimpressive innovation capacity, which is the "Achilles heel" of this rather large economy.

……

After years of efforts, our country’s overall level of science and technology has improved significantly, and is now in the important period of changing from quantitative growth to qualitative improvement, and some important areas are now among the world's advanced ranks. However, on the whole, oue key, core technologies are subject to the restriction of others, and this situaion has not fundamentally changed. The science and technology reserves for the creation of new industries and leading the future development of are far from enough. Our industries are still in the lower end of the global value chain, and our high technologies in military and security still have a large gap with developed countries.

协调 COORDINATED

要发挥各地区比较优势，促进生产力布局优化，重点实施“一带一路”建设、京津冀协同发展、长江经济带发展三大战略，支持革命老区、民族地区、边疆地区、贫困地区加快发展，构建连接东中西、贯通南北方的多中心、网络化、开放式的区域开发格局，不断缩小地区发展差距。要坚持工业反哺农业、城市支持农村和多予少取放活方针，促进城乡公共资源均衡配置，加快形成以工促农、以城带乡、工农互惠、城乡一体的工农城乡关系，不断缩小城乡发展差距。要坚持社会主义先进文化前进方向，用社会主义核心价值观凝聚共识、汇聚力量，用优秀文化产品振奋人心、鼓舞士气，用中华优秀传统文化为人民提供丰润的道德滋养，提高精神文明建设水平。要统筹经济建设和国防建设，建立全要素、多领域、高效益的军民深度融合发展格局，推进国防和军队建设同全面建成小康社会进程相一致，使两者协调发展、平衡发展、兼容发展。

To give full play to the comparative advantages of each region, promote the optimization of the layout of productive forces, focusing on the implementation of three major strategies: the Belt and Road Initiative, Beijing-Tianjin-Hebei collaborative development, the development of the Yangtze River Economic Belt. Support the the areas with revolutionary history, areas heavily populated by ethnic minorities, border areas, poverty-stricken areas to speed up development. Construct a development paradigm that links the East and West, and the South and North in a multi-centered, networked, open fashion and constantly narrow the regional development gap. Stick to the policies of industries feeding agriculture, urban areas supporting rural areas, and “giving More, taking Less and loosening control.” Promote a balanced allocation of public resources in urban and rural areas, and accelerate the formation of a new type of relations between industry and agriculture and between urban and rural areas in which industry promotes agriculture, urban areas support rural development, industry and agriculture reinforce each other, and urban development and rural development are integrated. We should adhere to the direction of advanced socialist culture, use the core socialist values to gather consensus and power, use excellent cultural products to uplift the people and inspire morale, use the excellent Chinese traditional culture to provide the people with rich moral nourishment, and improve the level of spiritual civilization building. We should coordinate economic building and national defense building, establish a full-factor, multi-disciplinary and efficient pattern of in-depth integration of military and civilian development, promote national defense and military building in line with the process of building a well-off society in all aspects, so that the two developed in a coordinated, balanced, and compatible fashion.

NOTE: Let’s break it down a little bit. Some places or sectors are richer, some places or sectors are poorer, and narrowing the gap - or at least stop the gap from widening - is what coordination means.

The paragraph identifies four aspects that need such coordination:

1) Between different regions. It’s common knowledge that Eastern and Southern China are richer, but other typically poor regions, as laid out above, include 革命老区、民族地区、边疆地区、贫困地区 areas with revolutionary history, areas populated by ethnic minorities, border areas, and poverty-stricken areas.

2) What also needs coordinating is between the industrial sectors and agriculture, where the latter is deemed poor and needs speeding up.

3) It’s interesting to see an emphasis on advanced socialist culture/spiritual civilization here, hinting that Beijing believes the building of the “spiritual” (production of cultural products, for example) is incompatible with the accumulation of material wealth and needs speeding up.

4) The coordination between the civilian economy and national defense, suggesting the development of the military will not fall behind the economy.

In the early years if not decades of reform and opening-up, China’s defense budget was sacrificed to make way for economic development, and in recent years Beijing has been righting this wrong. For the Chinese view on the issue, it may be helpful to refer to Reasonable and Appropriate Defense Expenditure, Page 35, China’s National Defense in the New Era, a government white paper in July 2019.

But the defense budget to be announced in the upcoming Two Sessions, starting March 5, may be interesting to watch given the financial need to support the post-COVID recovery. The South China Morning Post had a story today.

绿色 GREEN

This newsletter will be very long and this is perhaps what everyone understands so let’s save some space here: environment protection has been an absolute priority.

开放 OPEN

着力形成对外开放新体制。我国30多年来的发展成就得益于对外开放。一个国家能不能富强，一个民族能不能振兴，最重要的就是看这个国家、这个民族能不能顺应时代潮流，掌握历史前进的主动权。

经济全球化是我们谋划发展所要面对的时代潮流。“经济全球化”这一概念虽然是冷战结束以后才流行起来的，但这样的发展趋势并不是什么新东西。早在19世纪，马克思、恩格斯在《德意志意识形态》、《共产党宣言》、《1857—1858年经济学手稿》、《资本论》等著作中就详细论述了世界贸易、世界市场、世界历史等问题。《共产党宣言》指出：“资产阶级，由于开拓了世界市场，使一切国家的生产和消费都成为世界性的了。”马克思、恩格斯的这些洞见和论述，深刻揭示了经济全球化的本质、逻辑、过程，奠定了我们今天认识经济全球化的理论基础。

……

实践告诉我们，要发展壮大，必须主动顺应经济全球化潮流，坚持对外开放，充分运用人类社会创造的先进科学技术成果和有益管理经验。

Strive for the formation of a new system of opening up to the outside world. The development achievements of China over the past 30 years are thanks to opening up. Whether a country can be rich and strong, whether a nation can be revitalized, the most important thing is to see whether this country and this nation can follow the trend of the times and grasp the initiative of the advancement of history.

Economic globalization is the trend of the times that we have to face in order to plan our development. Although the concept of "economic globalization" became popular only after the end of the Cold War, such a development trend is not something new. As early as the 19th century, Marx and Engels discussed world trade, the world market, and world history in detail in their works such as The German Ideology, The Communist Manifesto, The Economic Manuscripts of 1857-1858, and Das Kapital. The Communist Manifesto states, "The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country." These insights and discourses of Marx and Engels profoundly reveal the essence, logic, and process of economic globalization and lay the theoretical foundation for our understanding of economic globalization today.

……

Practice tells us that in order to develop and grow, we must take the initiative to follow the trend of economic globalization, insist on opening up to the outside world, and make full use of the advanced scientific and technological achievements and beneficial management experience created by human society.

NOTE: The recent Western narrative on China’s economics appears to be that it has increasingly been inward-looking, including China pulls back from the world (FT) and China’s inward economic pivot (Bloomberg), which this newsletter will get to in the end.

But openness has always been on top of Beijing’s insistent, stated priorities. As cited above, classic Marxist documents were even cited to illustrate the reasoning behind embracing openness.

共享 SHARED

共享理念实质就是坚持以人民为中心的发展思想，体现的是逐步实现共同富裕的要求。共同富裕，是马克思主义的一个基本目标，也是自古以来我国人民的一个基本理想。

The essence of the philosophy of shared (development) is to adhere to the people-centered development thinking, which reflects the requirement of gradually achieving common prosperity. Common prosperity is a basic goal of Marxism and a basic ideal of our people since ancient times.

By now every one of the five concepts 创新、协调、绿色、开放、共享 innovative, coordinated, green, open and shared (development) making up the 新发展理念 new development philosophy has been explained, citing Xi’s speech in 2016.

So what did Xi say on this in 2021?

(continuing with the Jan. 11 readout of the class, via Xinhua in English, which is not a full translation of the readout in Chinese)

He ordered Party members to fully and faithfully practice the new development philosophy, whose "roots" and "soul" lie in striving for people's well-being and national rejuvenation.

Xi also stressed a problem-oriented approach in implementing the philosophy, calling for more targeted and pragmatic measures in addressing the issue of unbalanced and inadequate development.

Efforts should be made to strengthen awareness of potential dangers, persist in considering the worst-case scenario and always be ready to cope with even more complex and difficult situations, said Xi.

He didn’t explain what is the new development philosophy, as that has already been highlighted repeatedly before, but how to “implement” it.

Your Pekingnologist wants to draw attention to the 共享 shared/以人民为中心 people-centered part because one sentence in the communique of the Fifth Plenary Session in Chinese stands out:

全体人民共同富裕取得更为明显的实质性进展。

Common prosperity for all people shall make more tangible progress in substance.

Previously, what’s more familiar is Deng Xiaoping’s memorable quote in the early days

鼓励一部分地区一部分人先富起来

encouraging some regions and people to get rich first

Another part, albeit less famous, of Deng’s quote, is 先富带后富, meaning those who got rich first help/lead/bring along others to get rich later, so as to achieve common prosperity.

So after four decades of reforms and opening-up, some regions and some people apparently got very rich already. In the meantime, there is no denying that a huge wealth gap exists in China, and a truly equitable society, widely understood as the inherent and promised meaning of socialism/communism, can not be allowed to appear slipping out of the People’s Republic any longer.

In a sense, the massive poverty eradication campaign, which will be marked by a national commendation conference on Thursday, Feb. 25, is part of the effort to lift those at the very bottom of society.

Since the Fifth Plenary Session at the end of October 2020, Xi has mentioned the four-character term 共同富裕 common prosperity many times, including in a speech on the Yangtze River Economic Belt, a speech at the National Conference of Model Workers, a letter to the International Forum on Sharing Poverty Reduction Experience, a speech at the Central Economic Work Conference, the New Year’s Speech, the speech to the class for major leading cadres at the provincial and ministerial levels, at a group study session of the Politburo, in a visit to Guizhou on the eve of the Spring Festival, and at a meeting of Central Commission for Comprehensively Deepening Reform.

Notably, the recent emphasis on common prosperity is not only out of economic disparity. As Xi said on Jan. 11:

实现共同富裕不仅是经济问题，而且是关系党的执政基础的重大政治问题。

Achieving common prosperity is not only an economic issue, but also a major political issue related to the Party's governing foundation.

***

新发展格局 new development paradigm

习近平强调，加快构建以国内大循环为主体、国内国际双循环相互促进的新发展格局，是“十四五”规划《建议》提出的一项关系我国发展全局的重大战略任务，需要从全局高度准确把握和积极推进。只有立足自身，把国内大循环畅通起来，才能任由国际风云变幻，始终充满朝气生存和发展下去。要在各种可以预见和难以预见的狂风暴雨、惊涛骇浪中，增强我们的生存力、竞争力、发展力、持续力。

习近平指出，构建新发展格局的关键在于经济循环的畅通无阻。必须坚持深化供给侧结构性改革这条主线，继续完成“三去一降一补”的重要任务，全面优化升级产业结构，提升创新能力、竞争力和综合实力，增强供给体系的韧性，形成更高效率和更高质量的投入产出关系，实现经济在高水平上的动态平衡。构建新发展格局最本质的特征是实现高水平的自立自强，必须更强调自主创新，全面加强对科技创新的部署，集合优势资源，有力有序推进创新攻关的“揭榜挂帅”体制机制，加强创新链和产业链对接。要建立起扩大内需的有效制度，释放内需潜力，加快培育完整内需体系，加强需求侧管理，扩大居民消费，提升消费层次，使建设超大规模的国内市场成为一个可持续的历史过程。构建新发展格局，实行高水平对外开放，必须具备强大的国内经济循环体系和稳固的基本盘。要塑造我国参与国际合作和竞争新优势，重视以国际循环提升国内大循环效率和水平，改善我国生产要素质量和配置水平，推动我国产业转型升级。

Xi Jinping stressed that, as drawn in the Communist Party of China Central Committee’s Proposal for the 14th Five-Year Plan, it is a major strategic task for China's overall development to establish at a faster pace the new development paradigm featuring dual circulation, in which domestic and overseas circulations reinforce each other, with the domestic market as the mainstay. We need to accurately grasp the overall situation and actively promote it (the new development paradigm). Only upon standing on our own feet to smooth out the domestic circulation, can we survive and develop always full of vitality despite the changes internationally. We shall enhance our survivability, competitiveness, development capability, and sustainability in a variety of foreseeable and unforeseeable stormy weathers and turbulent waves.

Xi Jinping pointed out that the key to building a new development paradigm lies in the unimpeded flow of the economic circulation. We must adhere to the mainline of deepening the supply-side structural reform, continue to complete the important task of “三去一降一补” "cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness," optimize and upgrade the industrial structure, improve innovation, competitiveness, and comprehensive strength, enhance the resilience of the supply system, form a more efficient and higher quality input-output relationship, and achieve a high level of economic dynamic balance. The most essential feature of building a new development paradigm is to achieve a high level of self-reliance and self-improvement, and it is necessary to put more emphasis on indigenous innovation, strengthen the deployment of science and technology innovation, gather advantageous resources, introduce an open competition mechanism to select the best candidates to lead key research projects in a strong and orderly manner, and strengthen the docking of innovation and industrial chains. We shall establish an effective system to expand domestic demand, release the potential of domestic demand, accelerate the cultivation of a complete domestic demand system, strengthen demand-side management, expand consumer consumption, upgrade the level of consumption, for the construction of a super-large-scale domestic market to become a sustainable, long-term process. To build a new development paradigm and implement a high level of openness to the outside world, we must have a strong domestic economic circulation system and a solid base. We shall shape new advantages in China's participation in international cooperation and competition, pay attention to using the international circulation to enhance the efficiency and level of the large domestic circulation, improving the quality and allocation of our productive factors, and promote the transformation and upgrading of our industries.

(Quite a read, isn’t it?)

NOTES:

1) The new development paradigm is the “dual circulation,” known as DCS (“dual circulation” strategy) in China studies circles. A lot of impressive analysis on DCS has been done, including by Jude Blanchette and Andrew Polk at CSIS.

2) The first publication of the new development paradigm featuring the dual circulation appears to be the Politico Standing Committee meeting in May 2020 (CHN, Xinhua), but an article published on Oct. 31, 2020, in the Qiushi journal suggests Xi first elaborated on it in an April speech (CHN) titled 国家中长期经济社会发展战略若干重大问题 Some major issues in the nation’s medium and long-term economic and social development strategy.

3) The biggest international focus is whether the new development paradigm signals a general retreat by China from the world since, for example, the official phrasing has the domestic circulation as the 主体 mainstay.

Xi later stressed the new development paradigm 这决不是封闭的国内循环 is absolutely not a closed internal/domestic circulation. Liu He, Politburo member and Vice Premier, wrote on the People’s Daily 国内大循环绝不是自我封闭、自给自足 the internal/domestic circulation is absolutely not self-closing or self-sufficiency.

The signing of the RCEP, the conclusion of negotiations for the China-EU Comprehensive Agreement on Investment, and the stated interest in joining the CPTPP appear to confirm China’s continued interest in deepening openness.

Today, the vice minister of commerce Wang Shouwen even told a presser that China already had informal contacts with some members of the CPTPP and plans to engage with the rest of the members on technicalities, all the while conducting active research at home.

4) However, perhaps recognizant of uncertainties and hostilities externally, the balancing of internationalization and independence in key essentials (technology, food, etc.) does appear to skew the latter, considering the stated emphasis on indigenous innovation and supply chains.

Another angle: once the super-large-scale Chinese market is smoothed out as envisioned, it can be not only ensuring domestically but also leveraged externally - if that hasn’t been done already.

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To summarize:

新发展阶段 new development stage: the next thirty years, 2021-2049.

新发展理念 new development philosophy: 创新、协调、绿色、开放、共享, innovative, coordinated, green, open and shared (development).

新发展格局 new development paradigm: dual circulation, in which domestic and overseas circulations reinforce each other, with the domestic market as the mainstay, but not a closed, self-isolating Chinese economy.

Penned by Zichen Wang, founder of Pekingnology, a personal newsletter that does NOT represent the views of anybody else.

Errors may well exist, so suggestions for corrections and feedback are welcome - feel free to reply or send an email to zichenwanghere@gmail.com .