Outgoing General Secretary Hu Jintao reiterated the mantra of transforming the mode of economic development in coming years in his address to the 18th Chinese Communist Party Congress. Hu's speech stressed that pushing forward with economic reforms and adhering to "scientific development" are necessary to strengthen the country, make people happy, and maintain social harmony.
Hu's (China's) plans for the economy are ambitious. Hu calls for "urbanization," "industrialization," "informatization," and "agricultural modernization" in a coordinated and orderly manner. China is trying to engineer an industrial revolution in a couple of decades that took hundreds of years in western countries--without the social and political upheaval that accompanied the process in the West.
Secretary Hu's economic program is all things to all people--a free marketeer and a statist. His program is virtually indistinguishable from those floated in Washington, London, and Paris. Hu calls for "respecting the law of the market" while also calling for an improved role of the government in the economy. While he says there must be a shake-up and consolidation of state-owned companies, he also calls for new types of public ownership and for expanding the role of state-owned capital in key, "lifeline" sectors. Yet Hu also calls for encouragement, support and guidance for the "non-public" economy, open competition in markets and equal protection under law. He speaks of "comparative advantage," recommends supporting microenterprises and encourages free trade.
In place of ideology, Hu has substituted the mantra of "scientific development," his addition to the trinity of Mao Zedong thought, Deng Xiaoping theory, and [Jiang Zemin's] three representatives. Hu urges the country to "innovate" in science and technology. He suggests an innovation process with Chinese characteristics through a process of attraction, digestion, and absorption. This digestive tract theory of innovation is not explained, but it sounds a lot like stealing and re-engineering technologies from joint venture partners. His approach to "innovation" seems typically Chinese--designing a massive "system" that combines education, research, and industry with big government-fund projects. Translation: "Throw bundles of cash at the wall and see if anything sticks." Almost as an afterthought, Hu suggests implementing "the intellectual property strategy" to encourage innovation.
Another emphasis in Hu's speech is integration between cities and the countryside, basically undoing the dual economy that was constructed to exploit the peasants in the 1950s. Hu calls for reforming the household registration system and making it easier for rural people to move to cities in an orderly manner and gain access to urban public services. Hu says the system of expropriating rural land should give a greater share of benefits to rural people.
Hu recommends establishing a new agricultural system appropriate to China's newly urbanized society. Agriculture and industry should be integrated and develop for their mutual benefit. Agriculture should be concentrated (larger farms), professionalized (skilled professional farmers), organized (farmers join cooperatives or are linked with agribusinesses), and "socialized" (extension, pest control, and machinery services are provided by companies, cooperatives, and other nongovernment organizations). There should be more construction of rural infrastructure, upgrading of villages, and help and support for poor areas, regions populated by minority groups, border regions, and "old industrial areas."
Hu also includes a call for a more open economy that emphasizes both exports and imports. The strategy is to fully utilize foreign resources and seek "win-win" results. Hu encourages speeding up the "going out" strategy of Chinese companies investing overseas. Hu also calls for strengthening the economy's ability to guard against risks of exposure to the international economy.
This speech appears to be Hu Jintao's parting shot to solidify his "all-round well-off society" and "scientific development" mantras. The speech's reflects the priorities and strategies in the 12th five-year plan that calls for transforming the economy from an "export and invest" strategy to a more self-contained sustainable growth model. Can China wean itself from its reliance on sucking in export dollars, expropriating and reselling rural land, importing technologies, and building big projects?