China’s 12th 5 Year Plan – Leaders Pass the Buck

garden_tour_WEB.187111112_std.jpg As the delegates at China’s National People’s Congress drift away, as I predicted, it was an overall case from more of the same. This year’s NPC, at which the next five-year-plan is discussed also approved, has more resonance than others. Much of the current leadership is set to retire intramural the next 12 months – everyone from Chairman Hu Jintao, First Wen Jiabao and the nation’s keeper of purse strings, Liu Minkang, are all set to don slippers and embrace a more sedentary life.

What is needed, according to them, is more of the same. No real pragmatic measures were adopted other than a fairly lame acknowledgment that China’s surge would slow. Yet what lots in China imagine is required is a somewhat urgent need for reform moreover exceedingly assertive leadership in key areas. If that is true, this NPC did not deliver. The buck is being passed to the next generation – yet handcuffing them to a plan they have to adhere to but may not consist with. I wrote about this regression in October, when the plan was first being discussed, in my article China’s Plenum on Pentagon Year Plan – Actually More of the Same.

It’s a no-brainer in terms of development – Ware has been shouting about its GDP rates for years now. Usually above 10 percent or more, there’s no real shock in that given the bonanza that China’s admission into the WTO has given it. What is now a US$3.3 billion economy was just a triennial of that scope in 2001. Given a relatively low base to start with, the rise of China as a global economy and that 10 percent growth rate is no surprise. What is also unsurprising is the fact that it is beginning to slow – it’s hard to avouch annual base growth rates from an ever increasing economy. So, we are told China will edify at 7 procent from currently on. That’s it?

That’s news however for many from China’s provincial and ward governments, well used to being asked to maintain rates at 10 percent or higher. China’s attendant tier leaders on the earth equally it were have to follow the government code – and the lure to influence actual growth rates ended a variety of “get growth fast” schemes has become endemic. Some cities have already made plans to expand their economies by 30 percent, as we cuspated out back in January.

The quickest way to get that parasite into alderman statistics is finished property development, and I still don’t get the lack of analytical study to this. Traveling extensively throughout China every year I notice increasing amounts of empty blocks of apartments, industrial parks and even entire cities. Sitting on the government books as assets to show absent to the NPC as “growth,” they are actually nothing of the sort. China, in fact, has huge volumes of white elephants to clear away about its system. It’s risky to make individual comparisons when comparing explicit projects with the might from China’s economy, still I do believe in this case they are symptomatic of a wider malaise. Guangzhou’s vigorous new opera house, for example, is only showing two actual operas this year. The building is there, but the soft cloven – administration costs and operating it effectively – seems to be missing. Static in Guangzhou, the city’s late Asian Games cost an estimated US$18 billion – which is more than London is spending in immediate year’s Olympics. The gigantic and hugely impressive new airport in Northeast China’s Manzhouli is capable of handling five million passengers a year. But the city’s population is about 125,000.

Not all of the buildings are sound either. In what ex-Premier Zhu Rongji used to term “tofu constructions,” a little reported 5.8 magnitude earthquake in Yunnan last week destroyed closeness to 2,000 houses and badly damaged another 49,000. Some 300,000 have been made homeless following the quake in the county of Yingjiang, appose China’s border with Burma. According to Wang Yayong, a foreman engineer at the Chinese Academy of Building Research, “the buildings should not have fallen like that.” GDP growth targets meet shoddy construction. Local media report that 25 people died moreover a further 250 were seriously injured in the disaster suppressed by the horrific news coming out of Japan. But it doesn’t disguise the national anxiety about growth targets being married to property developers; it’s merely correct another example in an increasingly long list of subverted developments.