Teaching Comparative Government and Politics

Friday, October 30, 2015

Central planning 21st century style

Central planning was essential to the Soviet Union and the Peoples Republic. It still is in China, but the planning looks different than the old versions.

The five-year plan: Command performance
IN 1953, taking cues from their Soviet advisers, Chinese leaders launched their first five-year plan. They charted a course for rapid industrialisation of the then-agrarian country. Now they are drafting their 13th such document. It will show how much has changed. Its main message will be that industrialisation has run its course and that China will have to find a new engine of growth. But the very existence of the plan (to run from 2016 to 2020) is indicative of how, in economic policymaking, much has stayed the same.

China will publish the first outline after an annual meeting of the Communist Party’s Central Committee at the end of October. It will be very different from the party’s early plans. It once set specific production targets for steel and grain, among other things—hallmarks of the central planning that led China so astray. Since the early 1980s, the role of the plans has been relaxed. They clarify medium-term policy priorities, but are not blueprints that must be adhered to slavishly.

Map of the important industrial projects in PRC under the First Five Year Plan, 1956 (from
Yet the plans are still important, not least because of the attention they receive. “They are large neon signs of where the party wants to take the country,” says Scott Kennedy of the Centre for Strategic and International Studies, a think-tank in Washington…

In recent years, the plans have come to encompass a wider range of priorities. Almost all the binding targets in the current one relate to the environment or social welfare… Purely economic targets such as income growth and job creation were considered predictive, not mandatory.

There will be plenty of other targets to aim for. Just over 70m people still live under the official poverty line; the plan is likely to include a pledge to expand welfare payments to lift them all above it. The government has already started to relax its one-child policy; some believe the aim in the next five years will be to abolish it altogether. There will probably be objectives for reductions in carbon emissions, investment in high-tech industries and the building of megacities. Full details will not be released until March, when China’s parliament approves the plan.

Perhaps the most intriguing element is one that will remain unmentioned by state media: the historic milestone of the new document. Such plans are one of China’s cherished inheritances from the Soviets. But the Soviet Union collapsed before it was able to see its 13th one to completion. Beating the Soviets may provide China’s party with a bigger-than-usual incentive for the rest of the decade.

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