This is an article repost.
Much has been said about the importance of Five-Year-Plans (FYP) in the impressive growth of China and, more importantly, in the development of the Chinese people, serving as the beacon that unifies the huge and disparate regions. Every five-year-period in the country’s history is characterized by the Mission-Vision of their leaders of the time as agreed with the National People’s Congress.
This fact was highlighted by President Hu Jintao during the last Boao Forum for Asia (BFA) where I had the privilege to be a delegate with former President Fidel V. Ramos who, as one of its founding chairmen, brought the forum to be the most prestigious in Asia, if not in the world, today. I am preparing a separate report about BFA and its increasing role as the converging institution of the fastest-growing region in the world, placing great importance on sustainability which comes with its tradition of looking for shared solutions, and maintaining the peaceful environment. The Philippines’ public and private sector leaders should be more involved in BFA. We will then realize that many of the thorny issues facing us can be resolved in such consultations, and not by merely hanging on to the coattails of China, America or other major powers.
The new plan is different from the previous plans because China’s current scenario is different from the past. Today, one sees a country that is strong and stable rising to join the most affluent nations, signifying success in achieving targeted outcomes in their previous plans. Beneath this facade of 500 million Chinese in the coastal regions who have prospered significantly under the previous plans’ approaches, there are 900 million who remain poor and probably less satisfied than their brethren.
The top leaders, President Hu and Premier Wen, are fourth-generation leaders who are only too aware about this imbalance. They must be determined to make the 12th FYP as a watershed toward what they referred to “the 4 uns” of the Chinese economy that is strong on the surface but increasingly “unstable”, “unbalanced”, “uncoordinated”, and substantially “unsustainable” underneath. They are committed to reducing these “four uns” in the new plan. This is their chance to execute the “coup de grace” to close the poverty gap and to lead the world in social development, beating the Millennium Development Goals.
Therefore, instead of continuing with the strong growth orientation, the 12th FYP’s theme is “quality growth” focusing on rebalancing developments of investments, consumption and exports, to favor the individual. Environmental sustainability is being emphasized like never before, targeting for a 17% reduction in emission by 2015 despite continuing GDP growth, by no-nonsense energy conservation as we have done in the past and by emission reduction.
Yale University’s China expert, Stephen Roach, said that this will only be the third time a watershed event will take place in China brought about by a FYP. The 5th FYP (1976-1980) ushered in reforms and opening of Deng Xiapeng; the 9th FYP (1996-2000) set the stage for historic ownership with corporatization of their marketized economy.
This time, China will embark on a complete transformation, not only incremental improvements of its form of economic development. They would like to see their GDP growth to come more from domestic consumption, not to over-rely on exports and foreign technology, “old energy,” low-cost labor attraction, but on their strategic emerging industries (SEI) which are similar to our Sunrise Industries. A comprehensive social welfare program led by improved legal system, and greater national-level attention to mega-regional improvement plans, such as the Yangtze-Delta region, the Pearl River Delta region, the Beijing-Tianjin-Hebel city ring, the North-East region, etc. Mega Regional Plans do away with arduous debates on shallow parochial interests and instead point out how the strengths and weaknesses of one region can benefit from or to the rest of the country, with its competitive SEIs which are supported by appropriate infrastructure together with other spatial distribution of production factors, resources endowment, and the balance between and nature.
The adoption of the Megaregional approach in medium-term planning as practiced by Malaysia with its five megaregions was recommended by the National Competitiveness Council earlier to NEDA’s MTPDP. This gives the basis for formulating urban development plans, land use plans, without resulting in duplicity of efforts, to the benefit of the individuals. The regional differences will be better appreciated and their positions vis-a-vis our Sunrise Industries/Services can be optimized to improve competitiveness. It will hasten the integration of our regions. The issue should not only be about more, but better-quality, jobs and livelihood opportunities. As we mentioned in our past article, “Infrastructures must follow Strategy, to attract PPP participation.”
Their major infrastructure projects are clearly provided to support the objectives of the regional masterplans to enhance productivity and competitiveness of sunrise industries/services, to augment people development and social welfare of residents in every region and the viability in national terms. Our PPP projects can be seen as similar to their megaprojects, being distinct parts of a defined regional strategy, with clearly spelt out results that will benefit SEIs and individuals in the specific region, and well-defined expected viabilities of the investments.
Execution has always been the bane of any plan. In the 1930s when world leaders were planning for the League of Nations to forestall future world conflicts, John Meynard Keynes wrote of the blind and the deaf Don Quixotes who had nothing but motherhood intentions, with no constructive ideas whatsoever for clothing with the flesh of life, the lofty statements which were thundering down from their capitals.
Premier Wen, perhaps realizing the above threats in achieving plan outcomes, has emphasized that there will be well-equipped tracking mechanisms and equipment with statistical and monitoring capabilities to measure key factors such as greenhouse gas, jobs quality generation, projects progression with delivery of benefits, etc. The leaders will be assured that the new policies, no matter how revolutionary, will be proceeding according to expectations, and if there are deviations, can be brought back to course.
Nobel Economist Laureate Joseph Stiglitz observed that the new Development Plan is a framework that will move China in the right direction as GDP will no longer be a good measure of the living standard of the citizens. It will bridge the poverty gap and lift its 1.4 billion people to middle-class status by 2015 by providing employment and earning possibilities, as investments in broad-based SEI sectors will provide them more- and quality-opportunities, increasing the average wage rates.
Toward the latter half of the period, it is expected that the new President and Premier, Xi Jenping, and Li Kequiang, who are both involved in preparing this plan will be replacing the incumbents. What a seamless transition of leadership and continuity of policies which will serve as model for the rest of the world!
Its goal to achieve $10,000 GDP per capita in 2020 from around the $4,000 level today, indicating an annual grow rate of 7% average.
Last month, I wrote about the opportunities for the Philippines as a result of the difficulties besetting Japan. This article is about the opportunities opening up for the Philippines resulting from China’s realignment of its policies and priorities. However, we cannot just be like Juan Tamad who waits for the golden fruit to drop on his mouth as it breaks off the trees. We have to take proactive stance to identify prospects both near and far from China, which is destined to be a much bigger partner in the years to come. We have to develop our ability for intelligence gathering/processing, the knack and the linkages to spot opportunities early on in the game, and put in place our people and our resources to maximize the benefits for our economy. We should set up a multidisciplinary China Team. In business, we call, such a team as the Business Development Division, with responsibility to the CEO.
The article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines. The author is former private-sector co-chair of the National Competitiveness Council and former secretary of the Department of Trade and Industry. Feedback at [email protected]. For previous articles, please visit <map.org.ph>.
==============================================================================
By: Cesar B. Bautista – Map Insights
Source: Business World, July 26, 2011
To view the original article, click here.
Comment here