China defines over 300 goals to reach socialist modernization by 2029

Brasil de Fato

To deepen reforms in education, tax structure, scientific areas, technology, and the military sector among others were some of the goals established by the 20th Central Committee of the Communist Party of China (CPC) during its third plenary, focusing on a socialist modernization of the country by 2029.

The plenary’s final resolution has 60 articles answering seven general goals, which include building a high-level socialist market economy, advancing initiatives such as China’s Peaceful Rise and improving the Party’s “leadership capacity and governance in the long term.”

The goals aren’t new – they were defined in the 14th Five-Year Plan (2021-2025). However, this time, there are 300 measures and specifications that must be fulfilled by 2029, when the People’s Republic of China celebrates 80 years. Despite some measures being described generically, the resolution gives an idea of the country’s priorities for the next years.

Like the entire structure of the Chinese government and the Party, the Central Committee has a five-year term of office, during which seven plenums are held. The so-called third plenums have marked major changes in the country. It was the case in 2013, at the third plenary of the 18th Central Committee. The meeting set 2020 as the deadline for achieving decisive results – which was met, for example, in the case of eradicating extreme poverty, removing almost 99 million people from this condition in that period.

Another example was the process of reform and openness under the leadership of Deng Xiaoping, as explained by geopolitical analyst Victor Gao, who worked as a translator for Deng during the 80s. “In 1978, there was the third plenary of the 11th Party Congress, which was such an important event that now is considered a turning point of Chinese modern development.”

New productive forces

The development of new, high-quality, productive forces in China has become a priority.

The new resolution of the Party Committee determines that mechanisms be established to “guarantee an increase in the financing of industries of the future”, in addition to improving governance in the country “to promote the development of industries such as state-of-the-art information technology, artificial intelligence, aviation and aerospace, new energies, new materials, state-of-the-art equipment, biomedicine and quantum technology.”

The document also states that there will be changes in the financial system to boost scientific and technological innovation to provide more support for the main national programs and small and medium-sized science and technology companies.

One of the challenges in the new phase is training highly qualified workers – and not just in China. Last year, countries like Canada, Germany and the United Kingdom approved or updated laws to encourage the immigration of highly qualified workers.

In China, the enrollment rate in higher education has been growing steadily, reaching over 60% by 2023 – over 200 million skilled workers, 60 million highly qualified. However, there is a shortage of highly qualified professionals in technology and innovation. The Central Committee’s new resolution also states that approaches will be explored “to establish an immigration system for highly qualified personnel.”

In addition, it states that “employers will be given a greater voice” to improve “incentive mechanisms for talents,” and that channels will be opened to allow flows of professionals between universities and research institutes, on the one hand, and companies, on the other.

“China really wants to bet big on science and technology to ensure that scientific advances and creativity of all kinds are the main engine of our economic growth,” says Victor Gao, who is also a full professor at Soochow University, Taiwan.

One direction in the resolution of this plenary session is to move from “investing in physical capital” to “investing in people and physical capital equally”, according to the director of the Institute of Quantitative and Technological Economics of the Chinese Academy of Social Sciences (CASS), Li Xuesong, during a press conference.

He explained that investing in education and health strengthens social security, and promotes an increase in the income of urban and rural residents and the growth of middle-income citizens. According to the economist, this will promote the virtuous cycle of production, distribution, circulation and consumption.

“Investments in these areas are not just about education, but also involve medical care, health care and care for the elderly,” says Xuesong.

He explains that there are currently many incompatibilities and shortages in these areas. “For example, there is high demand for high-quality healthcare and education, but insufficient supply.”

There are also gaps, according to the elderly care expert: “Our facilities are inadequate”. He adds that “there is a significant gap in investment in human capital at different stages of the human life cycle, including education, health, medical care and elderly care in China,” he concludes.

The two centenary goals

China is in the first phase of the so-called Second Centenary goal. In 1997, the report of the 15th National Congress of the Communist Party of China (with Jiang Zemin as its general secretary) mentioned, for the first time, two centenary objectives or goals: the first was to build a moderately prosperous society in all areas by 2021, when the CPC turns a century old. The second has to be achieved in 2049, when the People’s Republic of China celebrates 100 years. By then, it is expected that China will have become a “prosperous, strong, democratic, culturally advanced and harmonious modern socialist country.” The resolution adopted at the meeting represents another step towards achieving the Second Centenary goal.

The real estate market

The resolution also establishes that a new development model will be promoted in the real estate sector. The idea is that the housing system will offer support for both renting and buying homes.

The real estate sector has played an important role in the Chinese economy in recent decades, accounting for between 25% and 30% of the country’s GDP. But the sector has also accumulated debt. The Chinese central government recently made a series of adjustments to the sector as part of measures to curb the so-called “disorderly expansion of capital.”

“We stress the need to build the new before discarding the old,” says Yang Zhiyong, director of the CASS Public Finance and Taxation Research Center.

“As an industry, real estate remains an indispensable part of the national economy and has a promising future. However, it will not develop as extensively as before,” he explains.

He says that new productive forces must be used to transform traditional industries. Thus, the real estate sector, as a traditional industry, is undergoing an innovation process along with other sectors, says economist Yang Zhiyong.

Following the plenum, Chinese President Xi Jinping has already held meetings with Party and military authorities, during which he asked for the principles of the Central Committee resolution to be studied and implemented.

Changes in revenue collection at the local level

With the change in the role of the real estate market, there will be a change in the sources of revenue for local governments. In recent years, the budgets of local governments – those below the provincial level – have depended heavily on revenues from land sales. The real estate sector’s adjustment policies, which have curbed the sector’s expansion, have led to a drop in local government revenues.

Therefore, the Central Committee resolution states that the sources of tax revenue at the local level will be increased, and “greater authority for tax management will be granted to local governments” and the “proportion of taxes shared between central and local governments” will be optimized.

The resolution also announces that measures will be taken to ensure that consumption taxes are collected “further down the production-to-consumption chain, with the power of collection constantly being passed on to local governments”.

Following the plenum, Chinese President Xi Jinping has already held meetings with Party and military authorities, in which he asked for the principles of the Central Committee resolution to be studied and implemented.