In my previous post, I talked about the “Eight Musts” and the “Five Cardinal Principles”, which outline the political agenda of the Xi administration. In this post, I noted that, in the realm of economics, we would need to look at the concrete measures and plans that the new leadership will put forward. Today, another People’s Daily article introduces the “Four New Modernizations”, which were presented by Li Keqiang on a visit to the State Administration of Grain. As with the “Eight Musts” and the “Five Cardinal Principles”, I believe this is an important policy proposition, as it directly refers to and updates the economic programme that Deng instituted now more than three decades ago. This is a decision that will not have been taken lightly.
The new four modernizations are the following:
- new industrialization (referring to the development of IT, green technology and other burgeoning sectors)
- agricultural modernization
These new four modernizations are touted as the logical successor of the previous four modernizations under new circumstances. The People’s Daily claims that they are more process-oriented than target-oriented, indicating that China had greatly surpassed the original objectives put forward by Deng at the start of the reform period. Substantively, it is indicated that more efforts will be undertaken to raise living standards both in cities and in the countryside, with particular mention of the 200 million peasant workers who have built up China’s cities but are not entitled to public services. These efforts will include energy saving, environmental protection, food safety and the creation of “intelligent cities”. Lastly, it is stressed that these modernizations form a mutually supporting package, which will require coordination in policy.
It is clear from these objectives that the Party-State will continue to derive its legitimacy from economic performance and delivery of material welfare, but that it has also taken a long and hard look at the problems that have materialized during the Hu-Wen decade. As such, this modernization package is a natural successor to the “Harmonious Society” and the “Scientific Development View” developed by Hu. In terms of concrete measures, it is clear that the next generation of private and foreign investment catalogues and scientific research plans will be strongly focused on the specific industries and sectors mentioned in these plans. This will mean significant opportunities for green tech, IT suppliers, plant variety suppliers, supply chain management and quality control, among many others.
Equally important is the mention of social objectives. Although it is undoubtedly so that the Party intends to maintain the current Leninist political structure, there is a significant social agenda on which it believes reform will not harm its monopoly on power, but enhance its legitimacy. The most important among these, and the one directly referred to, is the reform of the hukou registration system that currently bars migrant workers from access to urban public services, such as health and education. We have also seen moves on other fronts, such as an opening towards abolition of the much-maligned reform through labour system. Given that most protests and riots in China originate on the basis of economic disputes, movement in this area may go some way in reducing inequality and somewhat stabilizing China’s society.
One last important thing is the venue at which Li chose to make this announcement, the State Administration of Grain. China’s food security, both in terms of the quality of its food as the stability of its food supply is becoming an increasingly important political matter, certainly given the fact that China’s increasing consumption of upmarket foodstuffs, such as meats, is stretching its ability to remain self-sufficient. Here, it seems that Li at least is trying to send a signal that the new leadership is on that ball as well.