Understanding China’s Five Year Plan: Changhua Wu

22 March 2016

Following China’s annual National People’s Congress where the country’s 13th Five Year Plan was finalized, Changhua Wu, Greater China Director, The Climate Group, picks out some highlights of the Plan that underline the inevitable transformation China’s cleantech markets – innovators and leaders of which will be showcased at The Climate Group’s Global Cleantech Summit in Beijing tomorrow, March 23.

China is still in deep digestion of the Outline of the 13th Five Year Plan that will guide national development in the coming five years.

Majority opinion is positive, because we are after all seeing the vision, direction, strategy and priorities of the world's second largest economy in the coming decade. But some do have reservations, feeling that China remains good at saying new things but sometimes falls short on delivery.

My personal view of the Outline can be summed up in two words: continuity and transition.

The Plan is a continuity of the 12th Five Year Plan, in particular from the perspective of sustainable development and tackling climate change. China continues its mandatory commitment to energy, pollution and carbon intensity reductions – but now with more coverage of air quality and water quality.

And it is also an important transition plan. Because when the world is faced with challenges of economic downturn and slowed recovery, as well as geographic hot spots and refugees to EU, China must learn to size the challenge and seize the opportunity in the coming five years to create new growth drivers and deliver its set goals and objectives.

China has set its bigger vision of development as its absolute number one priority in the next five years, but development that is built upon quality and productivity. While the government has to deliver on the supply-side structural reform agenda, or simply the overcapacity issue, the tune is clearly set in terms of the mode of development.

And that tune is innovative, coordinated, green, open and shared. All of this is guided by the larger agenda of China’s ‘ecological civilization’, a concept which was first introduced in its 12th Five Year Plan.

But to me, low carbon economic highlights of the 13th Five Year Plan Outline can be listed in three tiers. Tier one includes:

  1. energy revolution that focuses on consumption or demand, efficiency, non-fossil fuel energy development, electricity market reform, and carbon intensity reduction;
  2. declared war on pollution that focuses on air, water and soil quality;
  3. a circular economy that focuses on resources reuse and recycling; and
  4. ecological functions zoning that considers how to protect ecosystems' goods and services.

Tier two includes:

  1. a new round of urbanization that focuses on land use and environmental quality; and
  2. rural development, agriculture and poverty alleviation as an important part of new growth drivers to create a new economy.

Tier three is the planned structural change that includes both economic and industrial structural changes, with the former focusing on development of tertiary industry and the latter on strategic emerging industries or the clean technology sectors.

You could also argue that tier four includes the tools and instruments to deliver the set targets that include technology innovation, greening financial sector and human talents, as well as the policy incentives that cover vision, goals and objectives, mandatory targets, laws and regulation and standards – as well as pricing instrument such as taxation and trading.

And while the Plan’s Outline must still be followed by thousands of similar plans from different ministries, regions, and sectors, this is the time when the country is in ‘planning the future’ mode.

I vote with confidence for China, in its endeavor to transition to a much more sustainable economy built on energy-efficient, innovative clean technologies. This is clearly the time to be part of China’s fast-growing cleantech markets.

Join us at Global Cleantech Summit 2016 tomorrow in Beijing, to witness 100 of the innovators in China and beyond who are leading the way.

Together we will create new growth drivers – and create a cleaner, safer, more prosperous future.

Follow the conversation on twitter using the hashtag #Cleantech2016

Enquiries and registration: mlo@theclimategroup.org

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