NDRC Prepares for Next Five-Year Plan, Focuses on Quality over Quantity

Owen Haacke

China’s leading economic planning body recently announced it had begun the initial research phase for the 13th Five-Year Plan (FYP)—the key social and economic policy blueprint for the 2016-20 period. The plan will build on the current 12th FYP and will serve as a framework to advance key national reforms introduced under Xi Jinping’s administration and adjust China’s economic growth model to maintain stable growth in light of a slowing economy.

The National Development and Reform Commission (NDRC) develops China’s national five-year plans—central policy planning tools adopted from the Soviet Union’s economic model—in consultation with relevant stakeholders and ministries. The final plans will require approval by China’s legislature, the National People’s Congress.

The timing of the upcoming 13th FYP is significant: in addition to being the first five-year plan under the Xi administration, it also aligns with the timeline for the key national reforms introduced during the third plenum last November, which are set to be completed by 2020. The 13th FYP will play a key role in laying down the policy framework to push forward the Xi administration’s goals and the some 300 reforms introduced during the plenum. Additionally, the plan marks a decisive period in meeting some of China’s other long-term national goals aimed at transitioning to a more developed economy, such as doubling per-capita GDP by 2020 from 2000 levels. 

Promoting national reforms, bolstering energy and environment efforts

Xu Lin, director of the NDRC Development Planning Department, said at an April 23 press conference that key priorities in the 13th FYP period will focus on promoting China’s transition to a high-income economy, according to World Bank standards, and emphasizing quality of economic growth instead of GDP growth. Xu also noted that initial research will revolve around 25 issues areas in line with Third Plenum goals, including adjustments to China’s economic growth model, modernization of the agricultural industry, SOE reform, and balancing the role of government and the market in the economy. The 13th FYP will also focus on developing the services sector, promoting strategic and emerging industries, and boosting domestic consumption.

Though plan details are still vague, Xu said strengthening energy efficiency and environmental protection efforts will be a key focus of the 13th FYP. A recent mid-term review of environment and energy targets in the 12th FYP revealed that China has fallen short of meeting its targets. However, Xu said this will not impact China’s efforts to address environmental concerns in the upcoming plan.

NDRC solicits applications to participate in initial research

In preparation for drafting the 13th FYP, NDRC is soliciting applications from universities, research institutions, large corporations, industry associations, and international organizations to participate in the initial research phase. Some of China’s other ministries and agencies have already selected participating organizations to provide input on industry-specific five-year plans. The National Energy Administration recently selected organizations to provide input on energy policies in the 13th FYP. Xu did not confirm the plan’s release date, but initial research will be submitted by the end of 2014 and drafting will be completed in 2015.

Foreign companies will also likely have the opportunity to directly weigh in before the plan is finalized. During the formulation of the 12th FYP, NDRC solicited comments from the general public, including foreign companies. USCBC will continue to monitor developments during the 13th FYP planning process, and will provide updates as opportunities become available for foreign companies to provide comments.