In his end-of-year speech, Chinese President Xi Jinping stated that China's 15th Five-Year Plan will be entirely focused on Artificial Intelligence. The recently concluded 14th Plan (2021-2025) focused on the "dual circulation" strategy (domestic market + foreign trade), driving economic growth not only through exports but also through investment in the domestic economy, particularly by targeting technological independence. The new plan will continue to push for technological independence, but this time through the deployment of AI in industrial processes, consumer products, healthcare, education, and digital governance. The plan aims for AI to be as ubiquitous as electricity or the internet by 2030, thus becoming a major driver of economic growth. The government claims China will become a "smart society" by 2035.
Earlier this year, the Chinese government held its annual "two sessions," or lianghui, during which China's political elite approves the economic policy agenda for the coming year. The term "two sessions" refers to two important political meetings: the Chinese People's Political Consultative Conference (CPPCC), a political advisory committee, and the National People's Congress (NPC), China's highest legislative body.
These are Chinese state assemblies, formally independent of the Communist Party. The consultative conference is largely symbolic, with prominent business figures and local leaders participating in pre-arranged discussions. The real heart of the meeting is the assembly, which officially decides on economic policy. In reality, it merely approves what the ruling elite of the Communist Party has already decided in advance. With approximately two-thirds of its members belonging to the Communist Party, the NPC has never rejected a party-proposed bill.
This year's "Two Sessions" were notable for approving economic policies for the current year and also greenlighting the 15th Five-Year Plan, intended to guide the Chinese economy until the end of this decade.
The Chinese government has set a real GDP growth target of approximately 4.5% to 5% for 2026. This is the first time since 1991 that the target has fallen below 5%. In presenting the economic goals, Prime Minister Li explained that the target had been revised downward due to uncertainties surrounding world trade and the geopolitical situation. Nevertheless, the growth target is modest, and the leadership appears confident of achieving it.
In 2025, China's real GDP growth was 5%, more than double that of the United States and triple that of other major G7 capitalist economies.
Since 2020, the government has set the goal of transforming China into a "middle-tier" economy (according to the World Bank's definition, economies with a per capita gross domestic product of $20,000 at 2020 prices) by 2035. This effectively means doubling per capita GDP over the next 15 years. China is clearly on track to achieve this goal, as it only requires China's per capita income to grow at an average annual rate of 4.17% from now on. But even if this goal were achieved, China's per capita GDP would still only be 27% that of the United States.
China's GDP and growth rates are challenging mainstream Western economists, as well as some economists on the heterodox left. The prevailing view, confirmed by analysts at the International Monetary Fund and the World Bank, is that the Chinese economy is slowing to a near standstill, heading toward Japanese-style stagnation, and may even collapse into a debt-fueled spiral. We are also told that China has "excessive" production capacity and is suffering from "involution," causing prices to fall and flooding world markets with cheap goods that threaten the market shares of major economies.
Economists have been repeating their recipe for years, and in recent years, China's production has grown without experiencing the crashes that have devastated the most advanced economies. China has avoided any recession or crisis over the past 50 years, even during the COVID pandemic, despite numerous errors and economic policy swings by the autocratic communist leadership. The key to China's economic success undoubtedly lies in its vast state-owned sector, capable of stimulating investment and thus achieving the goals of the national plan. This demonstrates the economic role of public ownership and government-led investment within a national plan.
Communist Party leaders define the Chinese model as "market socialism with Chinese characteristics," and for many analysts, this is sufficient to define China as an economy in transition to socialism.
To resolve this debate, it is not enough to look at the performance of the business cycle, gross domestic product growth, and the achievement of the five-year plan targets. Paradoxically, it is precisely the increase in GDP that can be considered an indicator of the growth of the market economy in China: as ownership of the means of production (including land) shifts from the state to private individuals, the market's weight in the economy increases. Thus, goods that previously passed from one state-owned production unit to another, and therefore were not recorded in the GDP calculation, are now transformed into commodities and passed between various private production units in the form of commodities through purchase and sale, signaling an increase in GDP that is not the result of an increase in the mass of production.
Piketty offers us a table showing ownership of the means of production from 1978 to 2018. According to this table, Chinese state ownership (both central and peripheral) increased from 100% of enterprises (listed and private, of all sizes) in 1978 to 55% in 2017, while Chinese citizen ownership grew to 33%, with the remaining 12% held by foreign investors. If the arrow of time has any meaning, it shows that China is an economy in transition... toward private ownership!
But there is an even more important element than the trend in GDP and ownership of the means of production, and that is the power of the working class. Because socialism is not higher wages or full employment, but the emancipation of the working class from the slavery of wage labor. Not only is the wage system in full swing in China, but there is also a lack of tools, such as councils, that allow actual producers to have a say in production.
The Chinese model is a holistic one based on the Communist Party, around which are organized the government, planning structures, large state-owned financial groups, large private companies, and small and medium-sized businesses with their Party cells. The goal is not to ensure maximum profit, but to guarantee social stability, with its pyramid and hierarchies. For this reason, it is necessary to avoid upheavals, crises, and wars as much as possible. China's transition reinterprets, in modern terms, some characteristics of the Asian mode of production, with state control over the basic means of production and an authoritarian and paternalistic form of government. Throughout China's millennia-long history, this philosophy has inspired most governments, but, despite everything, dynasties have often been overthrown by revolts, a sign that heavenly peace cannot reign in a class-divided society.
This Chinese model can easily be defined as reactionary, and its alliance with the equally reactionary regime in Tehran is natural.
Tiziano Antonelli
https://umanitanova.org/cina-transizione-celeste-un-piano-quinquennale-allinsegna-della-restaurazione-confuciana/
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Source: A-infos-en@ainfos.ca
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