Coordinated approach crucial for new five-year plan

Editor's note: China's high-quality development is crucial not only for its modernization but also for the stability and growth of the global economy. Wang Yiming, vice-chairman of the China Center for International Economic Exchanges, spoke to the Economic Daily to review the achievements of the 14th Five-Year Plan (2021-25) and analyze the direction of future development. Below are excerpts from the interview. The views don't necessarily represent those of China Daily.

The smooth progress of the 14th Five-Year Plan (2021-25) can be attributed to five essential principles. The first is coordinating the relationship between the market and the government. It is essential to leverage an effective market, create a fairer and more dynamic environment and achieve the optimal allocation of resources and maximum efficiency.

The second is coordinating supply and demand. Achieving this requires coordinated efforts on both the supply and demand sides, with a focus on expanding domestic demand while optimizing supply.

As a superlarge economy, China must focus on expanding domestic demand as a strategic objective, particularly addressing the shortfall in consumption.

Additionally, China must stabilize the fundamentals of foreign trade and foreign investment, increase both exports and imports, and build a new development pattern in which domestic and international circulation reinforce each other.

The third is coordinating the fostering of new growth drivers with the upgrading of older ones. Economic development requires a smooth transition from old to new growth drivers. This involves seizing opportunities presented by the technological revolution and industrial transformation, cultivating emerging and future industries and developing new drivers of growth.

It is also essential to upgrade traditional industries through digital empowerment, process improvement and management innovation. Innovation in science and technology should be the cornerstone of fostering new growth drivers. Given the regional disparities in resource endowments and industrial development, the cultivation of new quality productive forces must be tailored to local conditions.

The fourth is coordinating the relationship between supporting incremental growth and optimizing existing resources. Incremental growth creates opportunities for optimizing China's vast existing resources. Integrating these two aspects will allow China to better tap into its development potential.

The fifth is coordinating improvement in quality with increase in quantity. On the one hand, by combining the demand of its massive market with a comprehensive industrial system, China can cultivate more world-class enterprises and expand production. On the other hand, by enhancing innovation, increasing investment in new technologies and promoting digital and green transformation in traditional industries, product and service quality can be improved to enhance market competitiveness, thereby expanding market share and creating conditions for quantitative growth.

The 15th Five-Year Plan (2026-30) period will be a time to confront both strategic opportunities and risks. Global industry and supply chains are being reconstructed, with countries shifting focus from cost-efficiency to stability, which increases the risk of fragmentation. For China, it is critical to maintain its strategic resolve and sharpen its focus to gain the strategic initiative in international competition.

Domestically, the contribution of labor to economic growth will weaken, while factors such as aging of the population will lead to a decline in the savings rate. Total factor productivity will play a more prominent role in growth. Industrialization is entering a new phase, with the expansion of heavy industries nearing its end. Traditional industries will peak, even as the digital transformation of industries accelerates. The focus of urbanization will shift from rapid expansion to improving quality and efficiency, while green development will enter a critical stage.