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Policy Focus
The policy focus of the 20th Third Plenary Session of the CPC Central Committee covers multiple aspects such as economic reform, social governance, and technological innovation. Xi Jinping clearly pointed out at the meeting that high-quality economic development should be promoted by improving the efficiency of state-owned enterprises. According to the “China Daily” report, compared to the year before the meeting, the efficiency improvement of state-owned enterprises is expected to bring more than 10% GDP growth per year, significantly higher than the average growth rate of 7% in the past five years, demonstrating the government’s determination to adjust the economic structure. The central government emphasized that investment in high-tech industries will be increased in the next five years, with an estimated investment amount reaching 2 trillion yuan, an increase of 30% over the previous five-year plan. Minister of Science and Technology Wang Zhigang mentioned, “We must increase investment in artificial intelligence, 5G, quantum computing, and other fields to ensure breakthroughs in technology.” According to relevant data, the development of these fields will directly create jobs for more than 1 million technical personnel.
In terms of social governance, the government plans to achieve smart city construction in all county-level cities across the country by 2025, involving approximately 500 billion yuan in infrastructure investment. According to a report by the “People’s Daily”, these smart city projects are expected to improve the efficiency of public services by about 20%, reduce management costs by 15%, and improve the quality of life for citizens. The government plans to reduce carbon emissions by 20% in the next five years and increase investment in renewable energy to achieve carbon neutrality goals. Statistics show that China’s carbon emissions in 2019 were 9.8 billion tons, and to achieve this goal, the annual reduction needs to reach about 200 million tons. During the meeting, He Lifeng, the director of the National Development and Reform Commission, quoted data from the United Nations Climate Change Conference, pointing out, “China plays an increasingly important role in global environmental protection, and our policies must align with international standards.“
Regarding education reform, the plenary session proposed to increase the education budget by 5% in the next three years to improve educational conditions in rural areas. Minister of Education Chen Baosheng pointed out that improving the quality of education is the foundation of national development, especially in economically underdeveloped areas, and this policy will directly affect the future of millions of school-age children. The Healthy China strategy continues to advance, with the government planning to add 500,000 healthcare workers in the next two years and improve the service capabilities of primary healthcare institutions. Statistics show that there are currently about 3.5 million healthcare workers nationwide, and this policy will make medical resources more evenly distributed. According to data from the National Bureau of Statistics, China’s rural population was about 550 million in 2020, and the plenary session proposed to promote rural economic development by increasing agricultural subsidies and improving rural infrastructure.
Economic Reform
Xi Jinping emphasized at the meeting that efficiency and competitiveness of economic operations should be improved through deepening reforms. According to the “Xinhua News Agency” report, this meeting decided to implement a series of major economic reform measures to ensure that the economic growth rate in the next five years remains stable at over 6%. For state-owned enterprise reform, the government plans to improve the profitability of state-owned enterprises through market mechanisms and enhanced supervision in the next three years. In 2019, the average profit rate of state-owned enterprises was 4.8%, and this figure is expected to rise to 8% in 2023. Data from the National Development and Reform Commission shows that this reform is expected to generate more than 1 trillion yuan of additional income for the country each year. China National Petroleum’s net profit in 2019 was 45 billion yuan, and it is expected that through reform measures, this figure will increase to 75 billion yuan.
In terms of financial reform, further opening up of financial markets and encouraging foreign investment into China are planned. In 2023, the shareholding ratio of foreign capital in China’s securities market has risen from 2% in 2019 to 5%. China Securities Regulatory Commission Chairman Yi Huiman pointed out that further financial opening will attract more international capital and improve market liquidity and stability. It is expected that by 2025, the foreign shareholding ratio will reach 10%, bringing an additional 500 billion yuan of capital inflow to the Chinese economy. For example, Morgan Stanley’s investment in the Chinese market increased by 25% in 2022, reflecting foreign investors’ confidence in China’s financial market.
The government plans to complete the confirmation of ownership of all farmland nationwide by 2024 to improve land use efficiency. According to data from the Ministry of Agriculture and Rural Affairs, China currently has about 1.2 billion mu of farmland, and through confirmation of rights and land transfer reforms, agricultural output value is expected to increase by 300 billion yuan annually. The number of farmers’ cooperatives will also increase from the current 2 million to 3 million, further promoting rural economic development. For example, in Shandong Province, through land right confirmation, farmers’ average income increased by 15%, significantly improving the local economic situation.
In terms of tax policies, the government implemented about 1 trillion yuan of tax reduction measures in 2023 and plans to reach a total tax reduction of 5 trillion yuan in the next five years. This will reduce the average tax burden on enterprises by 15%, helping to improve their profitability and market competitiveness. After reducing the tax burden on small and medium-sized enterprises, the profit margin increased from 3% to 5%.
Technological Innovation
The meeting emphasized increasing investment in scientific research and promoting key technological breakthroughs to enhance China’s competitiveness in the global technology field. According to the “Science and Technology Daily” report, China’s R&D investment in 2023 accounted for 2.4% of GDP, and it is expected to increase to 3.5% by 2025, with an annual investment of more than 1.75 trillion yuan. In the field of artificial intelligence, China has become the largest market in the world. The government plans to increase investment in AI research and development over the next five years, reaching 500 billion yuan annually. Minister of Science and Technology Wang Zhigang pointed out, “We must simultaneously make efforts in basic research and application fields of artificial intelligence to ensure breakthroughs in this key technology.” Baidu’s AI platform, released in 2022, saw a 30% increase in user numbers.
China is already at the forefront of global 5G network construction. By 2023, more than 2 million 5G base stations have been built domestically, and the number of users has exceeded 500 million. The government plans to further expand 5G network coverage by 2025, achieving 5G coverage in all cities and most rural areas nationwide. Minister of Industry and Information Technology Xiao Yaqing stated, “The popularization of 5G technology will drive the development of industries such as smart manufacturing, smart cities, and autonomous driving.” 5G technology is expected to bring over 10 trillion yuan of new output value to the Chinese economy.
Quantum computing is another key technology mentioned. In 2020, the “Jiuzhang” quantum computing prototype developed by the University of Science and Technology of China achieved quantum supremacy, processing specific tasks a million times faster than traditional computers. The government plans to invest 100 billion yuan in quantum computing research in the next five years. China’s new energy installed capacity reached 1 billion kilowatts in 2023, accounting for 40% of the total installed capacity. Over the next five years, the government plans to add another 500 million kilowatts of new energy installed capacity and increase the proportion of renewable energy in total energy consumption to 25% by 2025. National Energy Administration Director Zhang Jianhua pointed out, “Vigorously developing new energy is a key step to achieving carbon neutrality.” The development of the new energy industry is expected to create more than 5 million jobs in China.
Chip manufacturing is also a crucial part of technological self-reliance. China plans to achieve a 70% chip self-sufficiency rate by 2025. Currently, the domestic chip self-sufficiency rate is 30%, and the government will invest 1 trillion yuan in chip research and manufacturing over the next five years. For example, SMIC plans to build a new 12-inch wafer fab in 2023 with an annual capacity of 120,000 wafers.
Livelihood Issues
According to the “People’s Daily” report, in 2023, the government’s investment in education, healthcare, housing, and employment accounted for 70% of the national fiscal expenditure. Education reform is an important measure to improve people’s livelihood. The plenary session proposed to increase the education budget by 5% in the next three years, especially to improve educational conditions in rural areas. Statistics show that in 2022, the primary and secondary education expenditure in rural areas accounted for 30% of the national total education expenditure, but the number of rural students accounted for 60%.
In terms of healthcare, the government plans to add 500,000 healthcare workers in the next two years. Currently, there are about 3.5 million healthcare workers nationwide, and the new staff will increase this number by 14%. The Healthy China strategy continues to advance, with the government having established 5,000 village health clinics nationwide in 2023, providing basic medical services to residents in remote areas.
The government plans to build 5 million units of affordable housing in the next five years to solve the housing difficulties of low-income families. In 2022, the housing vacancy rate in China was as high as 22%, while the homeownership rate of urban low-income families was only 40%. Minister of Housing and Urban-Rural Development Wang Menghui stated, “By increasing the supply of affordable housing, we can effectively alleviate the housing pressure of low-income groups in cities.“
In 2023, the urban unemployment rate in China was 5.1%. The government plans to control the unemployment rate below 4.5% by increasing public service jobs and supporting entrepreneurship and innovation. According to data from the Ministry of Human Resources and Social Security, 50 million new jobs are expected to be created in the next five years, especially for college graduates and rural laborers. Alibaba provided 100,000 jobs in 2022, showing the positive role of large enterprises in solving employment problems.
The government plans to achieve nationwide basic pension insurance by 2025, increasing the coverage rate of pension insurance. Currently, China’s basic pension insurance coverage rate is 85%, and it is expected to increase to 95% by 2025. In poverty alleviation, China’s rural poor population has been reduced to less than 10 million. The government plans to eliminate absolute poverty by 2025. According to data from the National Bureau of Statistics, from 2012 to 2022, the rural poor population decreased by 70 million, and the poverty incidence rate dropped from 10.2% to 0.6%. Director of the State Council Leading Group Office of Poverty Alleviation and Development Liu Yongfu said, “We will continue to strengthen the implementation of poverty alleviation policies to ensure that every poor family can escape poverty.“
Green Development
In 2023, environmental protection expenditures were increased to 1.2 trillion yuan, accounting for 6% of national fiscal expenditures. Reducing carbon emissions is the core goal of green development. Statistics show that China’s carbon emissions in 2019 were 9.8 billion tons, accounting for 28% of global emissions. The government plans to reduce carbon emissions by 200 million tons annually over the next five years. Beijing reduced carbon dioxide emissions by 500,000 tons in 2022 by promoting electric vehicles and new energy buses.
China’s installed capacity of renewable energy reached 1 billion kilowatts, accounting for 40% of the total installed capacity. The government plans to add another 500 million kilowatts of renewable energy installed capacity over the next five years. Inner Mongolia Autonomous Region added 5 million kilowatts of wind power installed capacity in 2022, increasing the proportion of renewable energy to 50%.
China faces severe water shortages, with per capita water resources in 2023 only 25% of the global average. The government plans to save 10 billion cubic meters of water annually nationwide in the next five years through strengthened water resource management and the promotion of water-saving technologies. Minister of Water Resources E Jingping said, “We must improve water resource utilization efficiency to ensure sustainable economic and social development.” The South-to-North Water Diversion Project has delivered 4.5 billion cubic meters of water annually to northern water-scarce regions since 2022.
China’s urban solid waste generation reached 200 million tons annually, and its treatment and recycling capacity needs to be improved. The government plans to achieve a 90% harmless treatment rate of urban waste nationwide within five years. Ecological protection through measures such as returning farmland to forests and grasslands will restore 100 million mu of ecosystems. Through the policy of returning grazing land to grassland, the grassland vegetation coverage rate in Inner Mongolia Autonomous Region increased from 30% in 2020 to 45% in 2023. Xi Jinping quoted Laozi’s saying, “Governing a great nation is like cooking a small fish,” emphasizing that green development is not only necessary for economic development but also a crucial part of ecological civilization construction. Only through green development can the coordination between the economy and ecology be achieved.
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