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Economy

China set to keep up 5% growth through 2035, Xi adviser says

Hu Angang expects fast-evolving tech sector to buoy economy

An employee works on a steel structure at a factory in Huzhou, Zhejiang Province. China is pursuing an economic strategy of "dual circulation" under President Xi Jinping.   © Reuters

BEIJING -- The Chinese economy will probably continue expanding at a roughly 5% annual clip over the next 15 years, an adviser to President Xi Jinping told Nikkei, citing a rapidly developing technology sector.

The comment comes ahead of a plenary session starting Monday for the ruling Chinese Communist Party's Central Committee, which will discuss long-term economic goals through 2035. Hu Angang, a professor in Tsinghua University's School of Public Policy and Management, said that "China has been able to control the coronavirus' impact on the economy, but many uncertainties remain in the world."

"If we take advantage of our massive domestic market, there is room for the Chinese economy to develop further," Hu said.

"China's high-tech capabilities are advancing rapidly, and it has become the world's largest exporter of high-tech products," the professor said. "China's high-tech exports have increased by an average of 7.1% a year from 2007 to 2018," he said.

The Central Committee will also discuss the five-year plan for 2021 to 2025 at the upcoming meeting. Although it announced a numerical growth target as part of its previous plan through 2020, Hu said it is "still too early to set a target" for the next five years.

Tsinghua University professor Hu Angang is an adviser to Chinese President Xi Jinping. (Photo by Tsukasa Hadano)

"The target can be set at the next National People's Congress, which starts in March 2021," he said -- suggesting that the next five-year target can be announced at the same time as the annual goal usually unveiled at the gathering.

Some in the Communist Party have also suggested delaying the announcement of a five-year target, likely hoping to wait for the outcome of the U.S. presidential election.

Interest is also high in how Xi's new economic strategy of "dual circulation" -- refocusing on domestic reliance while taking advantage of trade and foreign investment -- will be incorporated into the next five-year plan. The strategy is seen as a response to China's growing tensions with such Western nations as the U.S. and their impact on Chinese business.

Critics see China as essentially isolating itself and ending economic reform with dual circulation. In response, Hu said the strategy "should not close off the Chinese economy, but rather develop both internal and external circulation together."

"The idea is not only to reshape circulation within China, but also to renew the strengths of the circulation between China and the rest of the world," he said. China may be looking to incorporate friendly nations and advanced economies into its supply chains.

"China swiftly took control of the coronavirus outbreak and set good conditions to restart our economy," he said.

China's economy grew a real 0.7% on the year for the January-September period. "We could log a growth rate of 2% to 3% for the full year," Hu said.

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