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Greenville Business Magazine

China’s New Era

Jan 02, 2018 12:52PM ● By Emily Stevenson
By Xiaobo Hu
Director, Center for China Studies, Clemson University

During the 19th Party Congress in fall 2017, Chinese President Xi Jinping proclaimed that China had entered a new era. In this new era, the Chinese government’s main task is to meet the needs for prosperity of the overall Chinese population. President Xi did so as he started his second term of office as the leader of the Party. In the past four decades, each top Chinese leader tried to leave their marks on the history of Chinese development.

After Mao died in 1976, a group of veterans led by Deng Xiaoping became determined to redirect China’s development path by limiting the government’s intervention in the economy and opening up China to the world. In doing so, Deng started a new era different from Mao’s “new China.”

In 1949, Mao ended China’s modern history of turmoil and humiliation since the Opium War of the 1840s. Mao’s new China followed the path of most countries in nation-building and state-building, with much of concentration of power in the central government, plus a revisionist communist ideology. However, Deng deemphasized the role of ideology in economic development and decentralized the policymaking power to local officials and business managers. Deng’s new era saw further development under his successors, Jiang Zemin and Hu Jintao.

Under President Jiang, China became further liberalized with massive privatization and comprehensive marketization. The market was steadily opened up in all sectors except for a few “strategic” industries like defense, energy, finance, and telecommunications. At the end of Jiang’s two terms of presidency in 2002, about 80 percent of all businesses in China were non-State owned – that number has increased to more than 95 percent today, although most state-owned companies are much larger.

President Hu followed the same direction of development, yet with new emphasis on balanced and sustainable growth. He also tried to curb the growing disparity between the rich and the “disadvantaged.” Although China had alleviated more than 400 million Chinese out of poverty since the late 1970s, the Gini index went from 28 up beyond 45, which indicates greater disparity in wealth and income among the population.

Besides, in response to international concerns about China upsetting the existing world order and becoming a threat to world peace, President Hu emphasized China’s development model as following a “peaceful rise” doctrine – China’s development had benefited from the existing world order, hence will help preserve such order, President Hu confirmed.

To President Xi, the new era that starts with his second term involves at least two themes. First, the growing challenges to economic growth, social stability, and political development are formidable and overwhelming in face of the fact that after forty years China can no longer sustain the same high rate of economic growth as it has done so far. President Xi will face graver challenges than his predecessors did and he may not be able to postpone these mounting problems any more. In the new era, he has to start solving these problems, such as mounting local debts, rising cost of production, and growing housing bubble. Second, since Mao ended a century of turmoil and humiliation and brought China and its people to stand on their feet, and Deng ended impoverished socialism and the reform he launched has made China and its people rich, Xi thought it was time for China and its people to get strong.

For the new era, President Xi has set two goals: to achieve the status of a middle-income country by 2035, and to achieve the status of a modernized country by 2050. With these two goals reached, President Xi believes that China will be much more stable and its economy much more sustainable.