In Xi's own words: What's "dual circulation?" Why it's New Development Stage?

Internal speech to senior Party cadres now in public view

求是 Qiushi, the flagship journal of the Communist Party of China Central Committee, published in its latest issue the full speech (CHN) by General Secretary Xi Jinping to a class for major leading cadres at the provincial and ministerial levels on January 11.

It is the first time that the speech is unveiled in full. Previously, what’s available is only a readout/summary of his speech - via Xinhua in Mandarin and in English.

Based on the readout, Pekingnology on Feb. 26 published a lengthy piece called The "Spirit" of the 5th Plenum, explaining in great detail what are the 新发展阶段 new development stage, 新发展理念 new development philosophy, and 新发展格局 new development paradigm now dominating China’s official speak.

Bloomberg News, in writing about Pekingnology in March, referred to it as among the "fuzzier elements of Chinese politics like the ‘Spirit of the Fifth Plenum.’”

That Feb. 26 newsletter explained why you should pay attention. On top of that, also consider this: it was given exclusively to the class of major leading cadres at the provincial and ministerial levels - deputy ministers or provincial governors weren’t even present. Wouldn’t you want to be in that room?

So that is the aim of today’s newsletter, which will NOT repeat the points already made by the Feb. 26 newsletter, but focuses on the newly unveiled parts of the speech.

Please note neither that newsletter nor this one is a full translation. As always, usual disclaimers apply - the content here is neither official nor authoritative, as this is just a personal newsletter.

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What’s the New Development Stage?

我们党在运用马克思主义基本原理解决中国实际问题的实践中逐步认识到,发展社会主义不仅是一个长期历史过程,而且是需要划分为不同历史阶段的过程。1959年底至1960年初,毛泽东同志在读苏联《政治经济学教科书》时就提出:“社会主义这个阶段,又可能分为两个阶段,第一个阶段是不发达的社会主义,第二个阶段是比较发达的社会主义。后一阶段可能比前一阶段需要更长的时间。”1987年,邓小平同志讲:“社会主义本身是共产主义的初级阶段,而我们中国又处在社会主义的初级阶段,就是不发达的阶段。一切都要从这个实际出发,根据这个实际来制订规划。”今天我们所处的新发展阶段,就是社会主义初级阶段中的一个阶段,同时是其中经过几十年积累、站到了新的起点上的一个阶段。

In the practice of applying the basic principles of Marxism to solve China's practical problems, our Party gradually realized that the development of socialism is not only a long-term historical process, but also a process that needs to be divided into different historical stages. from late 1959 to early 1960, Comrade Mao Zedong, while reading the Political Economy: A Textbook issued by the Economics Institute of the Academy of Sciences of the U.S.S.R (ENG), proposed that "the stage of socialism, in turn, may be divided into two stages, the first being undeveloped socialism and the second being more developed socialism. The latter stage may take longer than the former one." In 1987, Comrade Deng Xiaoping said, "Socialism itself is the primary stage of communism, and we in China are in the primary stage of socialism, that is, the underdeveloped stage. Everything has to be planned from this reality and according to this reality." The New Development Stage we are in today is one of the primary stages of socialism and at the same time one upon decades of accumulation and a new starting point.

Notes: That the development of human society can and shall be divided into different 阶段 stages is a feature of Marxist teachings.

我国经济实力、科技实力、综合国力和人民生活水平跃上了新的大台阶,成为世界第二大经济体、第一大工业国、第一大货物贸易国、第一大外汇储备国,国内生产总值超过100万亿元,人均国内生产总值超过1万美元,城镇化率超过60%,中等收入群体超过4亿人。特别是全面建成小康社会取得伟大历史成果,解决困扰中华民族几千年的绝对贫困问题取得历史性成就。这在我国社会主义现代化建设进程中具有里程碑意义

Our country’s economic strength, scientific and technological strength, comprehensive national power, and people's living standards have jumped to a new great level, becoming the world's second-largest economy, the largest industrial country, the largest trading country of goods, and the country with the largest foreign exchange reserves, a gross domestic product of over 100 trillion yuan, a per capita GDP of over 10,000 US dollars, an urbanization rate of over 60% and a middle-income group of over 400 million people. In particular, great historical achievements have been made in building a moderately prosperous society in all aspects, and historic achievements have been made in solving the problem of absolute poverty that has plagued the Chinese nation for thousands of years. This is a milestone in the process of socialist modernization in China

我们已经明确了未来发展的路线图和时间表。这就是,到2035年,用3个五年规划期,基本实现社会主义现代化。然后,再用3个五年规划期,到本世纪中叶,把我国建成富强民主文明和谐美丽的社会主义现代化强国。

We have clearly defined the roadmap and timetable for future development. This is, by 2035, with three five-year planning periods, the basic realization of socialist modernization. Then, in three more five-year planning periods, by the middle of this century, we will build a strong, strong, democratic, civilized, harmonious, and beautiful modernized socialist country.

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当今世界正经历百年未有之大变局。最近一段时间以来,世界最主要的特点就是一个“乱”字,而这个趋势看来会延续下去。这次应对新冠肺炎疫情全球大流行,各国的领导力和制度优越性如何,高下立判。时与势在我们一边,这是我们定力和底气所在,也是我们的决心和信心所在。

The world today is experiencing the greatest change unseen in a century. In recent times, the world has been mostly characterized by one word - 乱/luan (chaos), and this trend looks set to continue. The response to the pandemic of COVID-19 has been a test to the leadership and institutional excellence of countries, and the results - which are good, which are bad - are obvious. Time and momentum are on our side, and this is where our determination and confidence lie.

Notes:

1) The world was summarized to be chaotic and judged to remain chaotic for quite some time. Note the speech was made on January 11, shortly before the transfer of power in Washington.

2) Time and momentum are on our side conveys a sense of confidence. Your Pekingnologist recalls that Bloomberg News ran a story on this quote at the time.

同时,我们必须清醒看到,当前和今后一个时期,虽然我国发展仍然处于重要战略机遇期,但机遇和挑战都有新的发展变化,机遇和挑战之大都前所未有,总体上机遇大于挑战。古人说:“慎易以避难,敬细以远大。”全党必须继续谦虚谨慎、艰苦奋斗,调动一切可以调动的积极因素,团结一切可以团结的力量,全力办好自己的事,锲而不舍实现我们的既定目标。

At the same time, we must see soberly that, in the current and future period, although China's development is still in an important strategic opportunity period, the opportunities and challenges are developing and changing, and the opportunities and challenges are both unprecedented - overall, the opportunities outweigh the challenges. There is an old saying "cautious dealing with easy things can avoid danger, careful handling of small things can keep big disasters away. The entire Party must continue to be modest and prudent, work hard, mobilize all the positive factors that can be mobilized, unite all the forces that can be united, spare no effort to take care of our own business to achieve our established goals in perseverance.

Notes:

1)

Despite now being routinely portrayed as arrogant (Bloomberg Opinion, Hal Brands), China internally preaches modesty and prudence.

2)

mobilize all the positive factors that can be mobilized, unite all the forces that can be united has for years been used by the CPC to suggest that the Party and the country should make friends wherever and whenever they can, instead of creating unnecessary foes or troubles.

3)

spare no effort to take care of our own business appears to be putting domestic issues at the top priority whatever changes internationally.

我们的任务是全面建设社会主义现代化国家,当然我们建设的现代化必须是具有中国特色、符合中国实际的,我在党的十九届五中全会上特别强调了5点,就是我国现代化是人口规模巨大的现代化,是全体人民共同富裕的现代化,是物质文明和精神文明相协调的现代化,是人与自然和谐共生的现代化,是走和平发展道路的现代化。这是我国现代化建设必须坚持的方向,要在我国发展的方针政策、战略战术、政策举措、工作部署中得到体现。

Our task is to comprehensively build a socialist modern state, and of course the modernization we build must be with Chinese characteristics and in line with Chinese reality. I particularly emphasized five points at the Fifth Plenary Session of the 19th Party Central Committee, that is, our modernization is a modernization with a huge population size, a modernization with common prosperity for all people, a modernization with coordination between material and spiritual civilization, a modernization with harmony between human beings and nature, a modernization of the peaceful development path. This is the direction that our modernization must adhere to, to be reflected in our development policies, strategies and tactics, policy initiatives, and deployment of work.

Notes: Xi repeated - again, this is January 11, 2021 - five points that he said he had made in the Fifth Plenary Session of the 19th Party Central Committee, which is mid-October 2020. That includes 走和平发展道路的现代化 a modernization of the peaceful development path.

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人民是我们党执政的最深厚基础和最大底气。为人民谋幸福、为民族谋复兴,这既是我们党领导现代化建设的出发点和落脚点,也是新发展理念的“根”和“魂”。只有坚持以人民为中心的发展思想,坚持发展为了人民、发展依靠人民、发展成果由人民共享,才会有正确的发展观、现代化观。苏联是世界上第一个社会主义国家,取得过辉煌成就,但后来失败了、解体了,其中一个重要原因是苏联共产党脱离了人民,成为一个只维护自身利益的特权官僚集团。即使是实现了现代化的国家,如果执政党背离人民,也会损害现代化成果。

The people are the deepest foundation and greatest strength of our Party's governance. To seek happiness for the people and rejuvenation for the nation is not only the starting and ultimate goal of our Party's leadership in modernization, but also the "root" and "soul" of the new development concept. Only by adhering to the people-centered development thought and insisting that development is for the people, development relies on the people, and the fruits of development are shared by the people, will we have a correct concept of development and modernization. The Soviet Union was the first socialist country in the world and achieved glorious achievements, but later failed and disintegrated. One of the important reasons was that the Communist Party of the Soviet Union was detached from the people and became a privileged bureaucratic group that only defended its own interests. Even in countries that have modernized, if the governing party turns its back on the people, it will damage the achievements of modernization.

NOTES: One of the important reasons was that the Communist Party of the Soviet Union was detached from the people and became a privileged bureaucratic group that only defended its own interests. This perhaps explains, at least partly, Xi’s unyielding push to crackdown on corruption.

实现共同富裕不仅是经济问题,而且是关系党的执政基础的重大政治问题。我们决不能允许贫富差距越来越大、穷者愈穷富者愈富,决不能在富的人和穷的人之间出现一道不可逾越的鸿沟。当然,实现共同富裕,要统筹考虑需要和可能,按照经济社会发展规律循序渐进。同时,这项工作也不能等,要自觉主动解决地区差距、城乡差距、收入差距等问题,推动社会全面进步和人的全面发展,促进社会公平正义,让发展成果更多更公平惠及全体人民,不断增强人民群众获得感、幸福感、安全感,让人民群众真真切切感受到共同富裕不仅仅是一个口号,而是看得见、摸得着、真实可感的事实。

Achieving common prosperity is not only an economic issue, but also a major political issue related to the Party's governing basis. We must not allow the gap between the rich and the poor to grow wider, the poor getting poorer and the rich getting richer, and an insurmountable gap between the rich and the poor must not appear. Of course, to achieve common prosperity, we must take into account the needs and possibilities, in accordance with the laws of economic and social development in a gradual manner. At the same time, this work can not wait, we must consciously and actively solve the problems of regional disparities, urban-rural disparities, income disparities, etc., to promote overall social progress and comprehensive human development, promote social justice, so that the fruits of development more and more equitable benefit all the people, and constantly enhance the people's sense of realization, happiness and security, so that the people really feel that common prosperity is not just a slogan, but a visible, touchable, real and perceptible fact.

Xi vows We must not allow the gap between the rich and the poor to grow wider, the poor getting poorer and the rich getting richer, and an insurmountable gap between the rich and the poor must not appear.

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Xi went on to list a number of problems and priorities

比如,科技自立自强成为决定我国生存和发展的基础能力,存在诸多“卡脖子”问题。比如,我国城乡区域发展差距较大,而究竟怎样解决这个问题,有很多新的问题需要深入研究,尤其是区域板块分化重组、人口跨区域转移加快、农民落户城市意愿下降等问题要抓紧研究、明确思路。比如,加快推动经济社会发展全面绿色转型已经形成高度共识,而我国能源体系高度依赖煤炭等化石能源,生产和生活体系向绿色低碳转型的压力都很大,实现2030年前碳排放达峰、2060年前碳中和的目标任务极其艰巨。比如,随着经济全球化出现逆流,外部环境越来越复杂多变,大家认识到必须处理好自立自强和开放合作的关系,处理好积极参与国际分工和保障国家安全的关系,处理好利用外资和安全审查的关系,在确保安全前提下扩大开放。

For example, scientific and technological self-reliance and self-improvement has become the basic capability that determines the survival and development of China, there are many “chokepoint” problems. For example, China's urban and rural regional development gap is large, and on how to solve this problem, there are many new issues need to be studied in-depth, especially the segmentation and restructuring of various regions, the speeding up of people’s migration across regions, the decreased willingness of farmers to settle in the cities - which shall be studied urgently and solutions proposed. For example, a high degree of consensus has been formed to accelerate the promotion of comprehensive green transformation of economic and social development, while our country's energy system is highly dependent on fossil energy sources such as coal, the system of production and living are under great pressure to transform to a green, low-carbon nature; to achieve the goal of carbon emissions peaking by 2030, carbon neutrality by 2060 is extremely difficult. For example, with the counter-current of economic globalization and an increasingly complex and volatile external environment, everyone must properly manage the relationship between self-reliance and openness and cooperation, manage the relationship between active participation in the international division of labor and safeguarding national security, manage the relationship between the use of foreign investment and security review, and expand openness under the premise of ensuring security.

要坚持政治安全、人民安全、国家利益至上有机统一,既要敢于斗争,也要善于斗争,全面做强自己,特别是要增强威慑的实力。宏观经济方面要防止大起大落,资本市场上要防止外资大进大出,粮食、能源、重要资源上要确保供给安全,要确保产业链供应链稳定安全,要防止资本无序扩张、野蛮生长,还要确保生态环境安全,坚决抓好安全生产。在社会领域,要防止大规模失业风险,加强公共卫生安全,有效化解各类群体性事件。要加强保障国家安全的制度性建设,借鉴其他国家经验,研究如何设置必要的“玻璃门”,在不同阶段加不同的锁,有效处理各类涉及国家安全的问题。

We must adhere to the organic unity of political security, people's security, and the supremacy of national interests, and we must both dare to struggle and be good at struggling, and strengthen ourselves comprehensively, especially to enhance the strength of deterrence. On the macroeconomic front, we should prevent big ups and downs, prevent foreign capital from entering and leaving the capital market rapidly on a massive scale, ensure the security of supply in food, energy, and important resources, ensure the stability and security of the supply chain and the industrial chain, prevent the disorderly expansion and wild growth of capital, and also ensure the security of the ecological environment and resolutely grasp the safety of production. In the social field, it is necessary to prevent the risk of large-scale unemployment, strengthen public health security, and effectively resolve various types of mass incidents. We should strengthen the institutional construction of national security, draw on the experience of other countries, study how to set up the necessary "glass doors", add different locks at different stages, and effectively deal with various issues related to national security.

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The following paragraphs elaborate on his thoughts on the “dual circulation” strategy. There have been numerous characterizations of it in both Chinese and foreign explanations and analysis (Google the term if you need to), but this should be considered the most authoritative, not least since it is his brainchild.

近年来,经济全球化遭遇逆流,国际经济循环格局发生深度调整。新冠肺炎疫情也加剧了逆全球化趋势,各国内顾倾向上升。新冠肺炎疫情期间,我到几个省进行调查研究,深入了解抗疫情况,调研复工复产中出现的问题。我在浙江考察时发现,在疫情冲击下全球产业链供应链发生局部断裂,直接影响到我国国内经济循环。当地不少企业需要的国外原材料进不来、海外人员来不了、货物出不去,不得不停工停产。我感觉到,现在的形势已经很不一样了,大进大出的环境条件已经变化,必须根据新的形势提出引领发展的新思路。所以,去年4月,我就提出要建立以国内大循环为主体、国内国际双循环相互促进的新发展格局,党的十九届五中全会对构建新发展格局作出全面部署。这是把握未来发展主动权的战略性布局和先手棋,是新发展阶段要着力推动完成的重大历史任务,也是贯彻新发展理念的重大举措。

In recent years, economic globalization has encountered counter-currents and the pattern of international economic cycles has undergone deep adjustments. The Covid-19 pandemic has also exacerbated the trend of counter-globalization, and the tendency of domestic concerns has risen in various countries. During the Covid-19 pandemic, I visited several provinces to conduct research and study, to gain an in-depth understanding of the anti-pandemic situation and to investigate the problems arising from the resumption of work and production. During my visit to Zhejiang, I found that a local break in the global supply chain and industrial chain occurred under the impact of the pandemic, which directly affected our domestic economic circulation. Foreign raw materials can not come in, overseas personnel can not come, and goods can not go out - all needed by many local companies, which had to stop work and production. I felt that the situation was now very different, the conditions for "da jin da chu" have changed, and new ideas to lead the development must be proposed according to the new situation. Therefore, in April last year, I proposed to establish a new development paradigm with a large domestic circulation as the mainstay, and the domestic international dual circulation to reinforce each other. The Fifth Plenary Session of the 19th CPC Central Committee made comprehensive arrangements for building the new development paradigm. This is a strategic layout and first move to grasp the initiative of the future development, and is a major historical task that needs to be promoted to completion in the new development stage, as well as a major initiative to implement the new development concept.

大进大出 "da jin da chu" is the second part of a two-part 提法 set phrase: 两头在外,大进大出 “putting both ends of the production process on the world (the sourcing of raw materials and the marketing of products), large-scale imports and exports.” It’s basically a term that originated in the 1980s describing China’s export-led strategy and the country’s making of the world’s factory. And Xi believes that’s no longer feasible - giving rise to the “dual circulation.”

我国作为一个人口众多和超大市场规模的社会主义国家,在迈向现代化的历史进程中,必然要承受其他国家都不曾遇到的各种压力和严峻挑战。毛泽东同志1936年的一段话,至今都对我们有启示意义。他说:“无论处于怎样复杂、严重、惨苦的环境,军事指导者首先需要的是独立自主地组织和使用自己的力量。被敌逼迫到被动地位的事是常有的,重要的是要迅速地恢复主动地位。如果不能恢复到这种地位,下文就是失败。主动地位不是空想的,而是具体的,物质的。”我们只有立足自身,把国内大循环畅通起来,努力炼就百毒不侵、金刚不坏之身,才能任由国际风云变幻,始终充满朝气生存和发展下去,没有任何人能打倒我们、卡死我们!加快构建新发展格局,就是要在各种可以预见和难以预见的狂风暴雨、惊涛骇浪中,增强我们的生存力、竞争力、发展力、持续力,确保中华民族伟大复兴进程不被迟滞甚至中断。

As a socialist country with a large population and a large market, China is bound to stand various pressures and severe challenges that no other country has encountered in the historical process of modernization. A quote from Comrade Mao Zedong in 1936 is instructive to us today. He said, "No matter how complex, serious, and miserable the environment, the first thing the military commander needs is to organize and use his own forces independently and autonomously. It is common to be forced by the enemy into a passive position, and it is important to recover the active position quickly. Failure to regain such a position is a failure. The active position is not imaginary, but concrete and material." We can only be based on ourselves - smoothing the great domestic circulation and striving to refine our body to withstand a hundred poisons - in order to withstand the changes in international storms and survive and develop always full of vitality. No one can beat us, choke us! Accelerate the building of a new development paradigm is to enhance our capabilities in survival, competitiveness, development and sustainability in a variety of foreseeable and unforeseeable storms and shocking waves; and to ensure that the great rejuvenation of the Chinese nation process not be delayed or even interrupted.

在实践中,我们要注意防范一些认识误区:一是只讲前半句,片面强调“以国内大循环为主”,主张在对外开放上进行大幅度收缩;二是只讲后半句,片面强调“国内国际双循环”,不顾国际格局和形势变化,固守“两头在外、大进大出”的旧思路;三是各自为政、画地为牢,不关心建设全国统一的大市场、畅通全国大循环,只考虑建设本地区本区域小市场、搞自己的小循环;四是认为畅通经济循环就是畅通物流,搞低层次物流循环;五是一讲解决“卡脖子”技术难题,什么都自己干、搞重复建设,专盯“高大上”项目,不顾客观实际和产业基础,结果成了烂尾项目;六是讲扩大内需、形成国内大市场,又开始搞盲目借贷扩大投资、过度刺激消费,甚至又去大搞高能耗、高排放的项目;七是不重视供给侧结构性改革,只注重需求侧管理,无法形成供给创造需求的更高水平动态平衡;八是认为这只是经济科技部门的事,同自己部门关系不大,等等。这些认识都是片面的甚至是错误的,必须加以防范和纠正。

In practice, we should pay attention and prevent some misunderstandings: first, only the first half of the sentence, one-sided emphasis on "the main domestic cycle", advocating a substantial contraction in the opening up of the outside world.

Second, only the second half of the sentence, one-sided emphasis on "domestic and international dual circulation", disregarding the changes of International situation and patterns, clinging to the old idea of "liang tou zai wai, da jin da chu."

Third, each region focuses narrowly on its own jurisdiction and region and does not care about building a unified national market or smoothing the domestic circulation - only considers building the region's own small market and engaging in their own small circulation.

Fourth, thinking that smoothing the domestic circulation is only is to open up logistics and engaging in low-level logistical circulation.

Fifth, whenever talking about solving the "chokepoint" problems, do everything all by themselves and engage in redundant projects; focus blindly on "high-level" projects, regardless of reality and industrial base, leading to messy, abandoned projects.

Six, when talking about expanding domestic demand and the formation of a large domestic market, engage in blind lending to expand investment, over-stimulation of consumption, and even to engage in high energy consumption, high-emissions projects.

Seven, not paying attention to the supply-side structural reform but focusing only on demand-side management, thus unable to form a higher-level dynamic balance of supply and demand.

Eight, thinking that all these only concern the economic and scientific sectors and having little to do with their own govt departments, and so on. These perceptions are all one-sided or even wrong, and must be prevented and corrected.

NOTES:

1) Xi made clear what is NOT the “dual circulation” that he proposed, notably pushing back against

在对外开放上进行大幅度收缩 substantial contraction in the opening up of the outside world

2) Xi also warned against

一讲解决“卡脖子”技术难题,什么都自己干、搞重复建设,专盯“高大上”项目,不顾客观实际和产业基础,结果成了烂尾项目

solving the "chokepoint" problems, do everything all by themselves and engage in redundant projects; focus blindly on "high-level" projects, regardless of reality and industrial base, leading to messy, abandoned projects.

The sentence could be read as a warning to the effect that yes indigenous innovation is very important but that’s not an excuse for every city or province to have its own semiconductor fabrication plants.

Not exactly sure if he was referring to any specific case, but the Wuhan chipmaking fiasco (NPR) immediately comes to the mind of your Pekingnologist.

3) Since high energy consumption, high-emissions projects are mentioned here, please note according to a readout via Xinhua (CHN), Xi said in a Politburo group study session on April 30 that

不符合要求的高耗能、高排放项目要坚决拿下来。

The high energy consumption and high emission projects that do not meet (relevant) requirements must be resolutely taken down.

It’s quite safe to predict projects that can be characterized as such would meet significant regulatory challenges, if not outright mission impossible.

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当今世界,最稀缺的资源是市场。市场资源是我国的巨大优势,必须充分利用和发挥这个优势,不断巩固和增强这个优势,形成构建新发展格局的雄厚支撑。扩大内需并不是应对金融风险和外部冲击的一时之策,也不是要搞大水漫灌,更不是只加大政府投入力度,而是要根据我国经济发展实际情况,建立起扩大内需的有效制度,释放内需潜力,加快培育完整内需体系,加强需求侧管理,扩大居民消费,提升消费层次,使建设超大规模的国内市场成为一个可持续的历史过程。

In today's world, the most scarce resource is the market. Market resources is our country’s great advantage, we must make full use of and give full play to this advantage, and constantly consolidate and enhance this advantage to form a strong support for building a new development paradigm. Expanding domestic demand is not a momentary measure to cope with financial risks and external shocks, nor is it about flooding the market with money, nor is it just about increasing government investment, but rather about establishing an effective system for expanding domestic demand, releasing domestic demand potential, accelerating the cultivation of a complete domestic demand system, strengthening demand-side management, expanding residential consumption, upgrading consumption levels, and making the construction of a mega domestic market a sustainable historical process.

构建新发展格局,实行高水平对外开放,必须具备强大的国内经济循环体系和稳固的基本盘,并以此形成对全球要素资源的强大吸引力、在激烈国际竞争中的强大竞争力、在全球资源配置中的强大推动力。既要持续深化商品、服务、资金、人才等要素流动型开放,又要稳步拓展规则、规制、管理、标准等制度型开放……我国企业的利益已延伸到全球各个角落,大家要注重了解国际事务,深入研究利益攸关国、贸易伙伴国、投资对象国的情况,做到心中有数、趋利避害。

To build a new development paradigm and implement a high level of openness to the outside world, we must have a strong domestic economic circulation system and a solid foundation, and use it to form a strong attraction to global factor resources, a strong competitiveness in fierce international competition, and a strong driving force in global resource allocation. We should continue to deepen the openness in the flow of factors such as goods, services, capital, talent and others, but also steadily expand the openness in institutional arrangements such as rules, regulations, management, standards and others…The interests of our companies have extended to all corners of the world, everyone should pay attention to understanding international affairs, deeply study countries that are stakeholders, trade partners, and investment targets, so as to have a clear picture and avoid harm.

Notes: Xi called on ministers and provincial leaders, many of whose portfolios apparently do not include external matters per se, to study international affairs.

我讲过,构建新发展格局最本质的特征是实现高水平的自立自强。当前,我国经济发展环境出现了变化,特别是生产要素相对优势出现了变化。劳动力成本在逐步上升,资源环境承载能力达到了瓶颈,旧的生产函数组合方式已经难以持续,科学技术的重要性全面上升。在这种情况下,我们必须更强调自主创新。因此,在“十四五”规划《建议》中,第一条重大举措就是科技创新,第二条就是突破产业瓶颈。我们必须把这个问题放在能不能生存和发展的高度加以认识,全面加强对科技创新的部署,集合优势资源

As I said before, the most essential feature of building a new development paradigm is to achieve a high level of self-reliance and self-improvement. At present, our country’s economic development environment has changed, especially the relative advantages of production factors have changed. The cost of labor is gradually rising, the capacity of resources and environment has reached a bottleneck, the old formula for production functions has become unsustainable, and the importance of science and technology has risen across the board. Under such circumstances, we must put more emphasis on indigenous innovation. Therefore, in the "14th Five-Year Plan", the first major initiative is science and technology innovation, and the second is to break through the industrial bottleneck. We must understand this issue on the height of survival and development, comprehensively strengthen the deployment of science and technology innovation, and mobilize superior resources

NOTES: This is interesting because for a long time, especially since the Trump administration pushed aggressive China policy, the prevailing narrative on Beijing’s emphasis on solving “chokepoint” problems has been that Beijing is largely REACTING, which in the opinion of your Pekingnologist is certainly true.

But that also tends to obscure another, perhaps more fundamental explanation - Beijing believes with the rise of labor cost, the pressure from environmental degradation, the competition from other low-cost economies, and everything else, scientific and technology is now the only viable way for China to climb the ladder, with or without the Entity List at the U.S. Department of Commerce and other restrictions.

***

党的十九届五中全会精神能否贯彻落实好,事关未来5年、15年乃至更长时期党和国家事业发展大局。全会通过的“十四五”规划《建议》内容十分丰富,既有宏观思路、指导原则、战略思想,又有具体要求,既有党的十八大以来一以贯之的战略部署,又有新的重大判断、新的战略举措,不狠下一番功夫,是学不到手的。学不到手,贯彻全会精神就抓不住要害、踩不到点上、落不到实处。各级领导干部特别是高级干部要原原本本学习、逐条逐段领悟,

Whether the Spirit of the Fifth Plenary Session of the 19th CPC Central Committee can be implemented well concerns the next five years, 15 years and even a longer period of the development of the Party and the country. The Proposal of the Central Committee of the Communist Party of China on Drawing Up the 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2030 adopted by the Plenary session is very rich in content, with macro-thought, guiding principles, strategic ideas, and specific requirements. It includes both the Party's consistent strategic deployment since the 18th National Congress, and new major judgments and new strategic initiatives. Without some serious effort, it is not easy to learn. If not well-learnt, the implementation of the spirit of the plenary session will miss the point. Leading cadres at all levels, especially senior cadres, should study the original text article by article and comprehend it paragraph by paragraph.

Time for a call back to the beginning of this newsletter: these “fuzzier elements of Chinese politics” are important stuff, which is why Pekingnology has spilled a lot of ink on this. You’re welcome to re-read the Feb. 26 newsletter The "Spirit" of the 5th Plenum.

For English speakers, the Center for Security and Emerging Technology (CSET) at Georgetown’s Walsh School of Foreign Service in December 2020 produced a translation of the Proposal that Xi asked leading cadres at all levels, especially senior cadres, to study article by article. The think tank that became a powerhouse for China researches in recent years and most recently sent Tarun Chhabra to the White House National Security Council apparently understood the importance.

Thanks for your time.