Opinion | China needs high-quality financial development to support its five-year goals – South China Morning Post

Report on China’s 15th Five-Year Plan and Alignment with Sustainable Development Goals

1.0 Executive Summary

Recent policy announcements from the fourth plenum of the Communist Party’s Central Committee and the Financial Street Forum in Beijing have outlined the strategic direction for China’s 15th five-year plan. The guidelines emphasize a model of high-quality development, technological self-reliance, and financial system reform. This strategy demonstrates a significant alignment with several United Nations Sustainable Development Goals (SDGs), particularly those concerning economic growth, innovation, and institutional stability. The plan aims to build a resilient economic model that supports long-term socialist modernisation goals through 2035, positioning its development within the global framework for sustainability.

2.0 Economic Strategy: Fostering Innovation and Resilient Industry (SDG 9)

The forthcoming 15th five-year plan is centered on the development of high-quality productive forces. This approach directly supports the objectives of SDG 9: Industry, Innovation, and Infrastructure, which calls for building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation.

• Technological Self-Reliance: A primary objective is to enhance domestic innovation capabilities to reduce dependency on external technologies and build a resilient industrial base.
• High-Quality Productive Forces: The economic model will be driven by innovation rather than traditional growth metrics, aiming for sustainable and high-value industrial output.
• Resilience Against External Threats: The plan is designed to strengthen the national economy against external headwinds and supply chain disruptions, ensuring industrial stability.

3.0 Financial System Reform and Institutional Strengthening (SDGs 8, 16, 17)

To support the real economy, China’s leadership has underscored the necessity of high-quality financial development. This involves comprehensive reforms aimed at stability, inclusivity, and international cooperation, reflecting key targets within several SDGs.

1. Risk Prevention and Regulation: Top financial officials have outlined measures to improve macroprudential regulation and manage risk effectively. This commitment to building stable and effective institutions aligns with SDG 16: Peace, Justice, and Strong Institutions.
2. Inclusive and High-Quality Growth: The financial system is being reformed to be more inclusive and supportive of sustainable economic development, a core tenet of SDG 8: Decent Work and Economic Growth.
3. International Cooperation: The announcement that China will continue to open its financial sector to foreign participation is a direct contribution to SDG 17: Partnerships for the Goals, fostering global economic integration and partnership.

4.0 Long-Term Growth Projections and Socio-Economic Advancement (SDGs 8 & 10)

The guiding principles for the 15th five-year plan are designed to achieve significant development milestones by 2035, with a clear focus on sustainable and equitable progress.

4.1 Guiding Principles

• Pursuit of high-quality development.
• Comprehensive deepening of national reforms.
• Balancing development objectives with national security.

4.2 Socio-Economic Targets

The plan projects an average annual GDP growth rate of approximately 4.17% through 2035. Achieving this target is expected to raise per-capita GDP to around US$20,000 by 2030, moving the nation into the mid-level range of advanced economies as defined by the World Bank. This advancement represents a significant step towards achieving SDG 8 by promoting sustained economic growth and contributes to SDG 10 (Reduced Inequalities) by raising national income levels and living standards.

5.0 Conclusion: Economic Scale and Global SDG Impact

International Monetary Fund projections estimate China’s GDP will reach US$26.3 trillion by 2030, making it an economic powerhouse requiring a substantially deeper and more resilient financial sector. The successful implementation of the 15th five-year plan, with its intrinsic focus on innovation, institutional stability, and high-quality growth, will be critical not only for national development but also for making a substantial contribution to the global achievement of the Sustainable Development Goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 8: Decent Work and Economic Growth

   • The article is fundamentally about China’s economic strategy for its 15th five-year plan. It discusses plans for “high-quality development,” specific GDP growth targets, and increasing per-capita income. The text states the plan is to achieve “GDP growth to 2035 would be around 4.17 per cent per year” and that “per-capita GDP by 2030 would be around US$20,000.” This focus on sustained economic growth and prosperity is the core of SDG 8.

2. SDG 9: Industry, Innovation and Infrastructure

   • The article highlights China’s determination to focus on “technological self-reliance” and building an “economic model of high-quality productive forces based on innovation and a strong industrial base.” This directly aligns with SDG 9, which aims to build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation.

3. SDG 17: Partnerships for the Goals

   • The article mentions the “announcement that China would continue to open up its financial sector to foreign participation.” This policy decision relates to strengthening the means of implementation and revitalizing global partnerships for sustainable development, specifically in the area of finance and attracting foreign investment, which is a key component of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Targets under SDG 8

   • Target 8.1: “Sustain per capita economic growth in accordance with national circumstances…” The article directly addresses this by setting a goal for “GDP growth to 2035 would be around 4.17 per cent per year” and aiming for a “per-capita GDP by 2030 [of] around US$20,000.”
   • Target 8.2: “Achieve higher levels of economic productivity through diversification, technological upgrading and innovation…” This is reflected in the article’s emphasis on achieving “technological self-reliance” and building an “economic model of high-quality productive forces based on innovation.”

2. Targets under SDG 9

   • Target 9.2: “Promote inclusive and sustainable industrialization…” The plan to build a “strong industrial base that is resilient against external threats and headwinds” is a direct reflection of this target.
   • Target 9.5: “Enhance scientific research, upgrade the technological capabilities of industrial sectors…, encouraging innovation…” This is clearly identified in the article’s statement about China’s “determination to focus on technological self-reliance” and an economic model “based on innovation.”

3. Targets under SDG 17

   • Target 17.5: “Adopt and implement investment promotion regimes for least developed countries.” While China is not an LDC, the principle of promoting foreign investment is central to this target area. The article’s mention that China will “continue to open up its financial sector to foreign participation” aligns with the spirit of creating favorable conditions for international financial flows.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicators for SDG 8

   • Indicator 8.1.1 (Annual growth rate of real GDP per capita): The article provides explicit quantitative goals that can be used to measure this indicator. It specifies a target “GDP growth to 2035 would be around 4.17 per cent per year” and a target “per-capita GDP by 2030 would be around US$20,000.”

2. Indicators for SDG 9

   • Implied Indicator related to 9.5.1 (Research and development expenditure as a proportion of GDP): While not stating a number, the strong emphasis on “technological self-reliance” and “innovation” implies a national strategy to increase investment in R&D, which this indicator measures.
   • Implied Indicator related to 9.b.1 (Proportion of medium and high-tech industry value added in total value added): The goal of creating “high-quality productive forces based on innovation” implies a strategic shift towards increasing the economic contribution of high-tech industries, making this a relevant, though unstated, metric.

3. Indicators for SDG 17

   • Qualitative Indicator for Target 17.5: The article provides a clear policy-based indicator: the “announcement that China would continue to open up its financial sector to foreign participation.” Progress can be measured by the implementation and scope of this policy.

4. Summary Table of SDGs, Targets, and Indicators

Source: scmp.com