The delegates of China's National People's Congress have approved the new five-year plan. China must reinvent itself economically. The leadership in Beijing is well aware of the risks, writes Philipp Bilsky.
While acknowledging the major problems facing China's economic development, Premier Li Keqiang ended the annual National People's Congress on an optimistic note. There are more reasons for hope than causes for concern, he believes. China will still meet its economic goal, rather than head for a crash landing.
The delegates had previously approved the new and ambitious five-year plan, which calls for an annual economic growth target of 6.5 percent until 2020. Moreover, the plan calls for drastically reducing poverty levels as well as doubling the 2010 levels of economic performance and per capita income by 2020. China must do no less than to economically reinvent itself within the next few years. It must restructure its economy from being the world's manufacturing hub to being driven by increased innovation, domestic consumption and services.
Social and political dynamite
It's indisputable that the planned economic reforms are headed in the right direction. But the recent months have shown that their realization has hit a snag. And there is also the unanswered question about whether the Chinese experiment will actually succeed.
Just how big a challenge the authorities are facing can be seen in the recent protests led by thousands of miners in northeastern China. The workers didn't receive any wages for months as China's coal mining industry struggled with overcapacity. According to the government, some 1.8 million workers are set to be laid off in the coal and steel industries alone.
Such measures are political dynamite, which could shake the legitimacy of the Communist Party to its very foundations. For decades, the Party stood for the prospect of economic prosperity - both today and in the future. Should the economic reforms fail, the social and political consequences would be unforeseeable.
The Chinese leadership is well aware of the danger. During the National People's Congress, the latest directives to ramp up censorship were leaked to the international press. They say that negative news coverage of the stock market is taboo, and that media outlets shall instead focus on examples of stable economic growth.
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