Reference News Network, March 20 report: Hong Kong's South China Morning Post website published an article titled "China Reimagines Its Economy in a More Complex World" on March 17. The author is Hu Xinhao, director of Hong Kong Concept Capital. The article is translated as follows:

Every spring, when China unveils its policy blueprint at the National People's Congress and Chinese People's Political Consultative Conference, global media headlines often focus on China's GDP growth target.

However, more important is China's new five-year plan (2026-2030). China's latest economic development roadmap shows a deeper shift: from a growth-oriented model based on quantity to a quality-centered development model.

The 14th Five-Year Plan points to something more fundamental: trying to redesign the engine of economic growth. For 40 years, China's economic model has relied on scale: increasing labor force, large-scale infrastructure, and an industrial system that transformed itself into the world's manufacturing center. China added power to the growth engine: more workers, more capital, and more construction.

This model has now reached its limits. The real estate industry is de-leveraging, and with the intensifying geopolitical competition, global supply chains are also fragmenting. Policymakers have recognized this changing landscape. Beijing no longer insists on reinforcing the old model but focuses on improving the efficiency of the growth engine itself.

Therefore, a more telling indicator is not the GDP target, but the productivity target. Productivity growth is expected to exceed economic growth - which means future economic growth must rely less on raw labor or capital and more on efficiency, technology, and innovation.

In other words, China's core challenge is becoming wealthier despite a shrinking labor force. This dilemma is not unique to China. Across the developed world, aging populations and slowing productivity growth are forcing governments to rethink the definition of prosperity. The difference for China lies in scale: few people have attempted such a transformation while managing the world's second-largest economy.

For a long time, the Chinese leadership has planned the country's economic development trajectory through two milestones: achieving the level of a medium-developed country in per capita GDP by 2035, and becoming a modern socialist power by 2049, the 100th anniversary of the founding of the People's Republic of China. These goals mean steady growth in per capita income, not just maintaining high overall economic growth.

Maintaining this trajectory will increasingly depend on productivity improvements. That is why the new five-year plan focuses on education, innovation, and technological upgrading. In fact, Beijing is attempting a difficult transition that many developed economies have struggled to achieve - shifting from investment-driven growth to productivity-driven prosperity.

Innovation has shifted from an industrial policy priority to a central element of macroeconomic strategy. The new plan requires an annual growth of more than 7% in R&D spending across society.

This reflects not only economic ambition but also strategic necessity. Due to export restrictions on advanced technologies such as semiconductors by the West, Beijing has made science and technology self-reliance and strength a core goal.

Innovation also requires a talent system to sustain it. The 14th Five-Year Plan emphasizes education, healthcare, and urban development, not as social policies, but as economic foundations. Over the next five years, the average years of education for the working-age population will increase from the current 11.3 years to 11.7 years, the average life expectancy will rise to 80 years, and the urbanization rate of permanent residents will increase from the current 67.9% to 71%.

These changes are economically significant because cities concentrate talent, capital, and supply chains in ways that accelerate innovation, while stronger health and education systems improve labor productivity.

The energy transition is another pillar. The share of non-fossil fuels in China's energy structure is expected to rise from around 21.7% to around 25%, while carbon emission intensity continues to decline. At first glance, these seem like environmental goals, but they also reflect broader efforts to reduce strategic vulnerabilities. A more diversified energy system and stronger technological capabilities help achieve the same goal: building a more resilient economy in an uncertain geopolitical environment.

When examining the hierarchy of goals in the plan, this logic becomes clearer. Economic indicators such as GDP growth and employment are "indicative" outcomes, while environmental and resource goals are identified as "binding" targets.

Economic miracles rarely end due to slower growth; they end when an economy fails to adapt to new constraints.

The debate about whether China can maintain around 5% economic growth misses the more important issue. The real question is how China intends to achieve growth in a world marked by an aging population, technological competition, and geopolitical uncertainty. From this perspective, China's latest five-year plan is not just about maintaining growth. It is about re-engineering the growth engine of the world's second-largest economy in a more complex and constrained era. (Translated by Lu Di)

Original: toutiao.com/article/7619244646249644590/

Statement: This article represents the views of the author alone.