Conventionally, foreign diplomatic envoys to China are invited to observe the opening and closing ceremonies of the “Two Sessions”, in a way to get a first-hand understanding of China's development strategy.

We believe that the Outline of the 14th Five-Year Plan (2021-2025) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 (the "14th Five-Year Plan"), which was reviewed and approved by the National People's Congress last week, is of key interest to the international community, including EU diplomats.

After bidding good riddance to absolute poverty and completing the building of a moderately prosperous society last year, China has embarked on a new journey of comprehensively building a modern socialist country in 2021.

China has made it plain: its goal is to “reach the level of moderately developed countries” by 2035. Roughly, it would mean to bring China’s 1.4 billion people to enjoy a similar level of GDP per capita as Spain or Italy, and to achieve green, inclusive, resilient, and competitive growth.

It will be a tough row to hoe and Chinese policymakers are fully aware of the unprecedented challenges: the accelerated evolution of global changes, the damaging consequences of COVID-19 pandemic, and geopolitical drag on the world economy.

Plus, a new wave of technology and innovation is reshaping the core competitiveness of major economies and most of them have expressed their climate ambitions to become "carbon neutral" around the middle of the century. Competition is tough in high-tech and green arenas.

Despite that, the document shows that China has designed a set of development paths and toolboxes after grasping the world trend. It has aimed to promote high-quality development, to coordinate development and security, to boost the modernization of the national governance system and governance capacity, and to achieve economic growth, social stability and harmony, the document was cited.

It is hard to question China’s strong capacity for planning and implementation: for the previous 13 five-year plans during 1953-2020, by and large, none of its targets were missed, or more precisely, most of them were materialized ahead of schedule.

Since taking office in late 2019, the new EU leadership has pinned its hope for economic modernization by steaming up digital and green engines. Since the outbreak of COVID-19 and especially in the new Biden era, Brussels has sped up efforts to update its strategies.

China and the EU have something in common: both double down on technological autonomy and innovation, eager to bolster green and digital transition and seek balanced and inclusive social development.

Next month, the EU is set to announce its new industrial policy. The CCCEU kindly suggests that EU policymakers could study the latest 14th Five-Year Plan in depth, compare their strategies and seek synergies so that to inject fresh momentum into Sino-EU partnership.

The slew of points are recommended to let European policy makers to have a glimpse of the goals and projects China is planning for the coming five years.

No. 01

China in 2035: a moderately developed country in sight

For the period 2021-25, China did not set a growth rate target for economic development, the first time since 1953, when it started its first five-year plan. However, the 14th Five-Year Plan clearly states that China will begin to build a modern socialist country, a goal that can be reached by 2050. China's total economic output and GDP per capita will reach levels of current high-income countries by 2025 and the economy size will be doubled by 2035.

Some experts rosily estimate that by 2035, China's GDP per capita will be about $25,000 to $35,000, roughly equal to the current levels of South Korea, Spain, and Italy; a British think tank predicted, in the post-COVID 19 era, China's economy may surpass that of the U.S. in 2028 based on nominal GDP.

No. 02

Innovation: core pillar to support China’s economic modernisation

In the next five years, two indicators are of strong significance: the number of high-value patents per 10,000 people will increase from 6.3 in 2020 to 12 in 2025; the added value of digital-economy core industry as a proportion of GDP will rise from 7.8% in 2020 to 10% in 2025.

Against the backdrop of U.S.-China trade and technology war, the EU’s "strategic autonomy", China in its new five-year plan decided to shore up strategic scientific and technological forces led by national laboratories, develop a ten-year action plan for basic research and aim for a fleet of research centers in this area.

China will also support Beijing, Shanghai, and the Greater Bay Area to build international science and technology innovation centers, and push forward the construction of comprehensive national science centers in Beijing’s Huairou district, Zhangjiang of Shanghai, and Hefei.

No. 03

Opening up: key to sustained growth

China plans to promote an open economy and support its “duel circulations”. At present, globalization is faced with headwinds while risks and uncertainties are intensifying, so it will be crucial for China to keep opening up to the outside world.

China will seek a high level of opening up, going beyond the commodity and factor flows and reach “new” levels in rules, standards, management, and other system-based openness.

The draft document said China should not just be satisfied with importing and exporting according to foreign rules or making investments. Instead, the country should “establish an institutional system and regulatory model that is compatible with the internationally prevailing rules.”

The country will further promote the interconnection of infrastructure, promote the rapid development of the China-Europe freight express, and further reduce items on the negative list for foreign investment access.

No. 04

Security: Resilience Cultivation for a mega-Economy

For the first time, the 14 Five-Year Plan sets up a special section on security development.

As an economy with almost five times the population of the U.S. or three times that of the EU, it is a huge challenge for China to resist risks and achieve secure development. In this sector, Chinese policymakers refer specifically to three areas: food, energy, and finance.

China is highly self-sufficient in food, but Chinese food production is highly vulnerable to natural disasters such as droughts and floods; and China's energy mix is heavily dependent on oil imports, so risks in these two areas are of great concern. Therefore, for the first time, two binding targets for comprehensive grain and energy production capacity are included: to increase its overall grain production capacity to over 650 million tons and its overall energy production capacity to more than 4.6 billion tons of standard coal by 2025.

No. 05

102 major projects

In the 14th Five-Year Plan, 102 projects were included, and this year will be time to promote the Sichuan-Tibet Railway, Xining-Chengdu Railway, and other major projects in transportation and water resources.

No.06

New urbanisation: 19 “mega-city clusters”

China mulls to increase its urbanisation rate to 65% and will make efforts on 19 “supercity clusters”. These city clusters are currently at different stages of development.

In the next five years, China will undertake different missions: optimize and upgrade five - Beijing-Tianjin-Hebei, Yangtze River Delta, Pearl River Delta, Chengdu-Chongqing, and Middle Yangtze River city clusters; develop and grow five - the Shandong Peninsula, Guangdong, Fujian, and Zhejiang coastal, Central Plains, Guanzhong Plain and Beibu Gulf, etc.; cultivate and develop 9 - urban clusters located in the northeast, central and western regions.

No.07

Green binding targets

The "green ecology" category replaces the "resources and environment" category in the "13th Five-Year Plan", and all such targets are binding and full of weight.

China aims to significantly lower the energy consumption per unit of gross domestic product (GDP) and its carbon dioxide emissions by 13.5 percent and 18 percent, respectively, during the 2021-2025 period.

No.08

Clean energy

China will establish an energy system that is clean, low-carbon, safe, and efficient, increasing the share of non-fossil energy in total energy consumption to around 20 percent.

Experts believe that this is not simply a matter of considering the deployment of electricity, but more importantly anchoring the change in energy pattern from high pollution and high emissions to low pollution and low emissions, which is a responsible strategic arrangement for China to achieve the carbon peak, carbon neutral commitment.

No.09

Mega Transport Network

The country aims to build 200,000 kilometers of railways, 460,000 kilometers of highways, and 25,000 kilometers of high-level sea lanes by 2035.

N0.10

Better health & education

During the 14th Five-Year Plan (2021-2025) period, China aims to increase the life expectancy of Chinese citizens by one year.

The country also seeks to build a high-quality education system and increase the average number of years of education of the working-age population to 11.3 years.