Xi’s dirigiste model

Weekly newsletter tracking high-level policy signals sent by China’s top leaders. For more information, visit About Five Things.

10-16 March 2024

Commentary

One of the longest-running themes of Xi Jinping’s period as China’s top leader is the shift from the quantity of GDP growth to the quality of that growth.

This shift was reiterated at the just-finished annual meetings of the National People’s Congress and Chinese People’s Political Consultative Conference, with its highlighting in the repeated calls for a focus on developing “new productive forces” (新质生产力).

The second most widely circulated article in China’s official media last week (Chinese, machine translation) explains what these are:

In the view of General Secretary Xi Jinping, new quality productivity is “characterized by innovation, the key lies in high quality, and its essence is advanced productivity.” Among them, technological innovation plays a leading role and is the core element in developing new productive forces.

The propaganda goal here seems clear: creating a phrase around which officials can rally – their task being to drive China forward guided by this mantra, and in the process create a new economic model.

Though these new productive forces alone will not solve China’s current macroeconomic problems – even if successful, they will not in themselves create enough economic mass to replace real estate and infrastructure investment as the drivers of growth.

But what they do seem aimed at creating is a much more dirigiste economy, in which officials are far more involved in business decision-making:

From “supporting high-quality development with high-level protection” to “coordinating high-quality development and high-level security”; from “consolidating the ecological foundation for high-quality development” to “expanding the path to realize the value of ecological products”; from “enhancing the consistency between ecological and environmental protection policies and macro policy orientations” to “steadily improving the level of people's livelihood security during development” … When making overall plans and making decisions, what is tested is the strong determination and foresight in governing the country.

This isn’t a return to central planning. Rather, it is having officials involved in directing resources, actively finding ways of playing coordination roles in linking finance, research, and production.

Private enterprises have a role in this – indeed, there is a concerted push to involve them, though often in the form of public-private partnerships rather than as force that should be unleashed in its own right.

The risk in all this that these new productive forces end up boosting claims to modernisation and science and technology, rather than the economy proper. Investment into manufacturing and research may be surging, but the returns in terms of broader growth are likely to prove elusive.

Top-ranked articles for 10-16 March 2024
% = percentage of publications monitored carrying the article

1. Second Session of 14th National People’s Congress concludes in Beijing
十四届全国人大二次会议在京闭幕
Xinhua News Agency, 11 March 2024
Chinese / Machine translation / 33%

2. Injecting strong momentum into promoting Chinese-style modernization
为推进中国式现代化注入强大动力
Xinhua News Agency, 11 March 2024
Chinese / Machine translation / 29%

3. Second Session of the 14th National Committee of the Chinese People's Political Consultative Conference closes
全国政协十四届二次会议闭幕
Xinhua News Agency, 10 March 2024
Chinese / Machine translation / 28%

4. Carry out the nomination and selection work of national medals and national honorary titles
做好国家勋章和国家荣誉称号提名评选工作
Xinhua News Agency, 13 March 2024
Chinese / Machine translation / 22%

5. “Seeking Truth” publishes important article by General Secretary Xi Jinping: “Emphasizing the need to maintain a clear and firm resolve in solving the unique and difficult problems faced by the Party, and to carry out the great self-revolution of the Party to the end”
《求是》杂志发表习近平总书记重要文章《时刻保持解决大党独有难题的清醒和坚定，把党的伟大自我革命进行到底》
Xinhua News Agency, 15 March 2024
Chinese / Machine translation / 21%

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