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Xi Jinping’s ‘Idea of China’

For investment advisors only

At the opening ceremony of the 19th Congress of the Communist Party of China (CPC) on October 18th, Xi Jinping, general secretary of CPC, called for the “the great rejuvenation of the Chinese nation” – or the realization of the “Chinese Dream.” In a speech lasting over 3.5 hours, Xi laid out the roadmap for the future of China which gave us a glimpse of what could be in store for China both in the medium and the long term.

Realizing the Chinese Dream

Fulfillment of the Chinese Dream, according to Xi, is based on the achievement of two goals:

  • to build a “moderately prosperous society” by wiping out poverty by 2021, and
  • to turn China into a “fully developed nation” by 2049.

Xi outlined a timetable for China to achieve developed nation status, saying that the party will first lead China to “basically realize socialist modernization” by 2035, when, among other things, the nation will have narrowed its wealth gap significantly. During the second stage, which will last from 2035-2050, China is expected to become a leading global power.  

Innovation, hi-tech the key drivers of transformation

In achieving its goals, China is expected to become a “country of innovators” which will be the driving force for economic development and deeper social transformation. “Innovation is the primary force that drives development and provides strategic support to a modern economy,” Xi announced.  

Besides encouraging the high-tech sector, Xi also emphasized government-backed industrial upgrades to push Chinese companies into the global high-end value chain. He said, “China should speed up manufacturing power, accelerate the development of advanced manufacturing industry, and promote the application of internet, big data, and artificial intelligence to real economy, and create new economic demands from high-end consumption, low-carbon economy, sharing economy and modern logistics.”

Foreign companies to get greater access

Xi promised to increase market access to foreign companies and hinted towards China playing a bigger role in the financial and exchange rate system.

Environmental Protection High on Agenda

Xi emphasized that China would take a leading role in fighting global climate change, and would invest in technologies that aid it. He pledged to build a “beautiful China” with a clean environment, and a responsive government stating that the government would fix the toxic levels of air, water and soil pollution that have plagued China for years. “No country can retreat to their own island. We live in a shared world and face a shared destiny,” he said, making an indirect reference to the US leaving the Paris climate accord.  

Xi Jinping’s speech gives us a glimpse of what we can expect from China in the coming years. It is increasingly becoming clear that China is making the right moves to be a global power. China has also identified the steps it needs to take to achieve that. 

 

Sources:

1. Xi Jinping speech likely to extend China’s technology exuberance for many more years, China Money Network, October 19, 2017;

2. Xi Jinping heralds 'new era' of Chinese power at Communist party congress, the Guardian, October 18, 2017;

3. Your five-minute summary of Xi Jinping’s three-hour Communist Party congress speech, Quartz Media LLC (US), October 18, 2017.

 

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Disclaimer

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.