Chinese dreams of the future

Xi Jinping's long-term ambitions could well lead to a wariness about China's intentions across the world

China has released its 14th Five-Year Plan(FYP) 2020-25 and its Long Range Objectives for 2020-35. These two documents set out the trajectory that China is determined to travel in what it refers to as the “next era” in history. At the end of 2035, the country is expected to achieve “socialist modernisation”, paving the way for the next big target of being a developed modern nation by 2049, marking the centenary of the founding of the People’s Republic. 

China’s gross domestic product (GDP) is to double in 2035 over 2020. Although no GDP growth targets have been set, this implies an annual 5-6 per cent rate. The Plan document maintains that China will aim for quality rather than quantitative growth and for this innovation will be the centrepiece of development strategy. It is notable that research and development (R&D) expenditure is slated to rise by 7 per cent annually, with a larger component devoted to basic research.

In recent years, China has welcomed the faster development of its service sector in comparison to its manufacturing sector. The 14th Plan shifts the emphasis back to manufacturing, the share of which should remain “basically stable.” This may have been triggered by the disruptions in supplies of critical products during the pandemic, including semi-conductors. One also finds a greater focus on strategic and national security related goals. 

The underlying theme of the Plan is “dual circulation”, in which the mainstay is domestic supply and demand. External circulation in the shape of foreign trade and investment flows is expected to reinforce domestic economic resilience and reduce import dependence.

The Plan and the Objectives document reflect the important guidance given by President Xi Jinping at the annual Central Economic and Financial Work Conference held in April 2020. He called for building “independent, controllable, secure and reliable supply chains to ensure industrial and national security with access to at least one alternative source for important products.” The strategic and geopolitical aspect becomes even more clear in his further call to “use existing global dependencies on China as a counterweight to pressures to shift manufacturing out of China, and to “use the pull of China’s market to attract global resources and deepen global dependence on China.”

In this context, what role is assigned to the external sector? The Plan reflects the reality that it has become more difficult to access advanced and sensitive technologies from Western sources but collaborations and partnerships are still possible in basic research. There is emphasis on seeking such partnerships and setting up overseas centres for pursuit of basic research. China’s talent plan to attract foreign scholars and researchers by extending favourable visa terms and offer of permanent residency are spelt out. At the same time, a more rigorous intellectual property protection regime is envisaged safeguarding high-tech areas that China has built up, including high-speed rail, telecommunications and power equipment.

Illustration: Binay Sinha

The strategic aspect is also evident in the renewed drive to promote military-civil fusion (MCF) which is integrally linked to the objective of innovation-led growth. For the defence sector, the Plan calls for undertaking a shift from “informatisation” to “intelligentisation.” This latter involves the application of Artificial Intelligence (AI), Machine Learning and Quantum Computing to give the Chinese military leapfrogging capability and address the current asymmetry it suffers vis-à-vis the US. In the contested maritime zone of the western Pacific, China may be able to deploy capabilities for surveillance, detection, targeting and strike using AI and associated capabilities. Acquisition of these capabilities would be part and parcel of a general technological upgrade of China’s industrial base serving both the civilian and military sectors. It is State-Owned Enterprises (SOE) which are assigned to lead this change but private sector would be expected to contribute as well. Private firms may be encouraged to enter into partnerships with SOEs. MCF would pose a major dilemma for western and Japanese high-tech firms because there may be no basis to assess whether or not transfer of technology will be insulated from military uses. Given the lure of the Chinese market, Xi Jinping certainly expects that greed will ensure that such technology flows will take place.

China’s goal is to put in place a range of technological capabilities and production facilities, which are synchronised and may be mobilised for national security and military purposes whenever the need arises. For example, sectors such as R&D, human resource and capacity building, certain kinds of infrastructure such as airports or satellite systems could all be candidates for MCF. Thus, the target of creating a “world class military” by 2049 parallels and goes hand in hand with the aim of creating a modern and developed country. This is akin to the concept of total mobilisation, which decades ago was pioneered as People’s War by Mao Zedong. Perhaps we are witnessing the emergence of its contemporary version under Xi Jinping

The 14th FYP and the Objectives reflect the expansive and ambitious goals for the realisation of what Xi Jinping has called the China dream. The trajectory to 2049 may pose bigger challenges than those faced by China during its period of rapid and impressive growth from 1978 to the present. President Xi’s remarks at the Economic and Financial Work Conference do not reflect the “win-win” formula that he often advocates. It is rather about how China’s modern mercantilist strategy could expand Chinese power at the expense of its trading partners, adversaries and “friends” alike. 

Economic exchanges are aimed at creating not mutually beneficial global interdependencies but “global dependencies” on China, which could be weaponised. China’s recourse to punitive commercial measures against its trading partners, with Australia the latest victim, will inevitably lead to a pushback and a wariness about China’s intentions across the world. The German statesman Otto von Bismarck had warned about the “cauchemar (nightmare) of coalitions” that a major and rising power is haunted by. This may well overwhelm the China dream. 

The writer is a former foreign secretary and a senior fellow , CPR