A momentous year
2017-12-25, PEARL LIU in Hong Kong

Over 205 minutes on the morning of Oct 18, China’s top leader Xi Jinping laid out a vision of the future that would not only see the country evolve into a “moderately prosperous society” by 2020 but work with the global community to address the many challenges facing the world. 

“No country can alone address the many challenges facing mankind; no country can afford to retreat into self-isolation,” Xi, general secretary of the Communist Party of China Central Committee (CPC), said in his report to the 2,338 delegates at the 19th National Congress of the CPC in Beijing and the hundreds of millions who watched around the world. 

“We call on the people of all countries to work together to build a community with a shared future for mankind, to build an open, inclusive, clean, and beautiful world that enjoys a lasting peace, universal security, and common prosperity.”

Through key appearances and events in 2017, including the World Economic Forum in Davos, Switzerland, in January, the first Belt and Road forum in Beijing in May, and his epoch-making speech at the Party Congress in October and gatherings of world leaders in November and December, Xi both underlined China’s views and cemented the country’s position as a champion of globalization.

“We should continue to foster an open economy that benefits all. Openness brings progress, while self-seclusion leaves one behind,” Xi, also president, told the Asia-Pacific Economic Cooperation (APEC) CEO Summit in Da Nang, Vietnam on Nov 10.

Xi called for seizing the opportunity of a global economy in transition and accelerating development of the Asia-Pacific. “The building of a free trade area of the Asia-Pacific (FTAAP) is the long-cherished dream of the business community in our region,” he said. The FTAAP process was launched in Beijing in 2014. 

“Acting on the principle of achieving shared growth through consultation and collaboration, we will get actively involved in reforming and developing the global governance system to make the international political and economic order more just and equitable,” he said.

For China, the goal is to build bridges and a multilateral world order that drives everyone to success, all the while working to eliminate poverty and protect the environment. That was Xi’s key message throughout a busy year marked by solid economic growth and the expansion of the Belt and Road Initiative — the China-led plan to build a trade and infrastructure network that revives the ancient Silk Road routes connecting Asia to Europe and Africa.

“The problems troubling the world are not caused by globalization,” Xi said in Davos on Jan 17. “Countries should view their own interest in the broader context and refrain from pursuing their own interests at the expense of others.”

“We should not retreat into the harbor whenever we encounter a storm or we will never reach the opposite shore … No one will emerge as a winner from a trade war,” Xi said.

If the continued pace of growth in China is any indication, there is much to be said for this view. China’s GDP expanded 6.9 percent year-on-year to 59.3 trillion yuan ($8.98 trillion) in the first three quarters, and as 2017 comes to an end, full-year growth is expected to surpass the target of around 6.5 percent. 

In its latest World Economic Outlook, the International Monetary Fund predicted the Chinese economy would grow 6.8 percent in 2017 and 6.5 percent in 2018, which was 0.1 percent higher than July’s forecast.

“President Xi’s Davos address marks that China now is leading globalization,” said Miao Lu, secretary-general of the Center for China and Globalization. “In the past, we were one of the participants of globalization. Now we are the leader.”

“A community of shared future is President Xi’s interpretation of globalization,” said Miao. “And we have put it into the Constitution of the Communist Party, which means that we officially define our role in globalization in our system.”

In his keynote speech at the opening of the Communist Party of China in Dialogue with World Political Parties High-Level Meeting on Dec 1, Xi described four scenarios of the future: a world that is safe and free of fear, a world that is prosperous and free of poverty, a world that is open, inclusive and free of isolation, as well as a world that is environmentally clean and beautiful.

His letters to the Fourth World Internet Conference on Dec 3, the 2017 Fortune Global Forum on Dec 6 and the South-South Human Rights Forum on Dec 7 all contained a common commitment to openness and cooperativeness.

In 2017, Xi not only emerged as a champion of globalization but also pushed forward with the country’s signature program aimed at facilitating it — the Belt and Road Initiative.

In Beijing in May, China wrapped up the first Belt and Road Forum for International Cooperation, attended by over 1,500 officials, scholars, entrepreneurs and journalists from more than 130 countries and 70 international organizations. Among them were 29 heads of states and governments. 

“This initiative is from China, but it belongs to the world. It is rooted in history, but it is oriented toward the future. It focuses on the Asian, European and African continents, but it is open to all partners,” Xi said at the APEC Business Summit in Vietnam.

Concrete and detailed projects were discussed for implementing the strategy of connecting some 65 countries directly affected by the initiative. Xi pledged $124 billion to build trade infrastructure and boost the links between Asia, Africa, Europe and beyond.

“Since President Xi (first) proposed the initiative in 2013, we have talked a lot about the Belt and Road at our end, but the forum marked that it is officially an international platform, promoting global economic development,” Miao said.

This was echoed by Tang Qifang, associate research fellow with the China Institute of International Studies, who said “the biggest achievement this year is that through the forum, we accelerated the implementation of the policy, for example the construction of the mega railway project in Malaysia and the launch of the third government-to-government project with Singapore in Chongqing” in Southwest China. 

Thomas Chan Man-hung, director of the One Belt One Road Research Institute at the Chu Hai College of Higher Education in Hong Kong, said: “A lot of infrastructure projects have been approved this year under the Belt and Road Initiative and this will greatly fuel economic growth through exploring the huge untapped markets in the areas such as Central Europe and Central Asia.”

Chan said globalization has served as a major factor supporting the transition of China’s economy this year and will continue to do so in the near future. As Xi said: “China’s economy has been transitioning from a phase of rapid growth to a stage of high-quality development … We must put quality first and give priority to performance.”

Chan said: “China has made important supply-side structural changes aimed at developing a modernized and more sustainable economy. The transition, so far, I see is successful and the country is going in the right direction.”

Even as China builds links, other countries are cutting them, and this may open up opportunities. With the US pulling out of multilateral deals such as the Trans-Pacific Partnership and even, perhaps, the World Trade Organization (WTO), and the United Kingdom leaving the European Union, there is room for China to fill the global leadership vacuum, said Miao of the Center for China and Globalization.

“We saw this year’s WTO meeting in Buenos Aires (Argentina) ended without any substantial agreement. The world is calling for China to take the initiative to promote free trade,” said Miao.

Tang agreed and noted that, at the same time, China may be the only trade power willing and able to take a leadership role because it meets a number of criteria. 

“The economy of that (leading) country should have a large amount of demand for foreign trade and an open market. Meanwhile, the country should be at the front line of technology and innovation,” said Tang. “And China is the only one that can meet these criteria.” 

For Xi, innovation has been another key theme. He has called for advanced technologies to be “embedded” into the real economy to foster growth.

In his speech at the Party Congress, Xi said “innovation is the primary force driving development, and it is the strategic underpinning for building a modernized economy. We will strengthen basic research in applied sciences, launch major national science and technology projects, and prioritize innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies.”

According to the National Bureau of Statistics, China’s spending on technology research and development rose 10.6 percent to 1.57 trillion yuan in 2016, accounting for 2.11 percent of GDP. The figure should, if anything, be larger once numbers for 2017 are calculated. 

And even as it took a greater role in the global arena through 2017, China — led by Xi — continued to work on internal issues, such as pushing forward with structural reforms to the economy and working to lift more people out of poverty. The goal, as Xi made clear, is to create a “moderately prosperous society” by the end of the decade.

The president also addressed concerns over rising property prices and underscored that houses were for people to live in, not for speculation.

Chan of the One Belt One Road Research Institute said: “The cooling measures issued from the central government to local related authorities this year have seen effect. Purchasing of homes was restricted.

“While we may see more people going to those first-tier cities, like Beijing, Shanghai and Shenzhen, the population structure in the rest will be more stable, and with those restrictions we will see less speculation.”

One of the main issues is the continuation and completion of the grand project of eliminating poverty throughout the country. 

In 2011, China set a line that describes people with annual incomes below 2,300 yuan per year as poor. The progress to date has been nothing short of astounding, with the rural population living in poverty decreasing from 770 million in 1978 to 55.75 million in 2015. Through 2016, another 12.4 million people were lifted out of poverty.

Fighting poverty is crucial for China to become a moderately prosperous society, Xi said in his Party Congress address. He set 2020 as the target for all provinces below the poverty line to climb above that threshold.

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