In its inward orientation, the Five-Year Plan reflects the fact that China's leadership is very much aware of the major challenges. Even after the officially successful end of the campaign to reduce poverty, rising inequality remains an urgent problem. Beijing faces the huge task of stabilizing the social security system and supporting rural regions.
With the new Five-Year Plan, China intends to redirect investment to smaller cities and rural areas to narrow the gap between wealthy and poor regions and to make poverty reduction sustainable. In view of the intense discussions within China on food security, modernizing agriculture is also an urgent task.
To support the domestic base, China's leadership faces a difficult balancing act – on the one hand, converting industry from quantitative to high-quality production, on the other hand, ensuring basic needs are met in poorer regions. The investment needed is likely to be difficult, even for a country like China with its high foreign exchange reserves.
After the successful fight against the Covid-19 pandemic, Beijing is formulating a worrying approach to dealing with “contradictions” in society in its Five-Year Plan. Further investment in the security apparatus is just as much a part of this as the merging of security agencies and public bodies, the expansion of digital surveillance, and political campaigns to mobilize the masses. In difficult domestic and foreign policy times, control remains the order of the day for Xi's leadership.
China’s main targets for 2021 in numbers:
- GDP growth: >6.0%
- Military spending 6.8% (up from 6.6)
- Deficit growth 3.2% (down from 3.6%)
- Creation of new urban jobs: >11 million (up from 9)
- Unemployment: around 5.5%
- CPI increase: around 3.0%
- Energy consumption per unit of GDP: around 3.0%
Related expert analysis: MERICS senior analyst Nis Grünberg spoke to Zeit Online about China’s climate politics (in German)
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