Apply the New Development Philosophy in Full

Apply the New Development Philosophy in Full*

January 11, 2021

To lead the people in exercising governance, we must be clear about what development we want and how to achieve it. On October 29, 2015, at the Fifth Plenary Session of the 18th CPC Central Committee, I stated, “Philosophy is the precursor of action, and likewise, certain developments are led by certain philosophies. Philosophy decides, in a fundamental manner, the success of results. Practice has shown us that as development will undergo changes influenced by the prevailing environment and conditions, development philosophy will change accordingly.”

Since the 18th CPC National Congress in 2012, based on a careful assessment of the economic situation, our Party has made timely adjustments to our development philosophy and our way of thinking, which have resulted in historic progress and transformation in the economic development of our country. Here, I would like to mention the most significant of these philosophies.

First, we have followed the people-centered philosophy of development. On November 15, 2012, when the new Standing Committee of the Political Bureau of the 18th CPC Central Committee met with Chinese and foreign journalists, I emphasized our dedication to the goal of meeting the people’s aspirations for a better life and to the path of common prosperity. On October 29, 2015, at the Fifth Plenary Session of the 18th CPC Central Committee, I presented the vision of people-centered development. On October 29, 2020, at the Fifth Plenary Session of the 19th CPC Central Committee, I further emphasized the need to make substantive progress in promoting common prosperity for all our people.

Second, we have stopped thinking that the GDP growth rate is the sole barometer of success. On December 15, 2012, at the Central Conference on Economic Work, I emphasized that we cannot blindly pursue rapid growth with no regard for objective laws and conditions. On April 25, 2013, at a meeting of the Standing Committee of the Political Bureau, I emphasized that local governments should not take national regulatory growth targets as the baseline for local economic development, nor should they compete with each other to achieve higher growth rates. I highlighted the need to focus on improving the quality and returns of growth, so as to achieve sustained and healthy development, realize genuine rather than inflated GDP growth, and raise economic efficiency, quality and sustainability.

Third, China’s economy has entered a period defined by a complex situation. On July 25, 2013, at a meeting of the Standing Committee of the Political Bureau, I noted that our economy was now facing a complex situation which involved a shift in the growth rate, a painful structural adjustment, and a need to absorb the fallout of previous stimulus policies. At the same time, the global economy was also in a period of profound adjustment, which made for a very complex international environment. This required us to gain a proper understanding of the characteristics of China’s current development stage and to undertake reforms and adjustments as needed.

Fourth, China’s economy has entered a new normal. I pointed this out on December 10, 2013, at the Central Conference on Economic Work. At the same conference on December 9 the following year, I analyzed nine development trends to explain why our economic development had entered a new normal. I made it clear that understanding the new normal, adapting to it, and guiding it would constitute the main theme of China’s economic development both at that time and in the period ahead.

Fifth, we have enabled the market to play the decisive role in resource allocation, and the government to better fulfill its functions. I said at the Third Plenary Session of the 18th CPC Central Committee in November 2013 that the market is the most efficient means of allocating resources, and that it is a general economic law that the market decides the allocation of resources, thereby redefining the role of the market in China’s economy.

Sixth, we have committed to the idea that lucid waters and lush mountains are invaluable assets. I put forward this concept during a speech at Nazarbayev University in Kazakhstan on September 7, 2013. I explained that developing an eco-civilization and building a beautiful China is a mission of strategic importance, because we want to leave behind a beautiful homeland with blue skies, green fields, and clean waters for our future generations. I reiterated this point during the deliberation session of the Guizhou delegation to the Second Session of the 12th National People’s Congress on March 7, 2014.

Seventh, we have applied the new development philosophy. I proposed the idea of innovative, coordinated, green, open and shared development at the Fifth Plenary Session of the 18th CPC Central Committee in October 2015. I explained that under this new philosophy, innovative development focuses on growth drivers; coordinated development aims to solve imbalances; green development highlights harmony between humanity and nature; open development prioritizes interactions between China and the international community; and shared development underpins social equity and justice. I said at the session that the introduction of the new development philosophy marked a profound change with important implications for China’s overall development. 

Eighth, we have launched supply-side structural reform. At a meeting of the Central Leading Group for Financial and Economic Affairs on November 10, 2015, I called for a greater effort to promote supply-side structural reform. I stated on December 18, 2015, at the Central Conference on Economic Work, that the five priorities in promoting supply-side structural reform were cutting overcapacity, reducing excess inventory, deleveraging, lowering costs, and strengthening areas of weakness. At the same conference on December 19, 2018, I proposed the guidelines of consolidating the gains in the five priority tasks, strengthening the dynamism of micro entities, upgrading industrial chains, and ensuring unimpeded flows in the economy. I pointed out that these guidelines constituted a general requirement for furthering supply-side structural reform and spurring high-quality economic development both at that time and in the period ahead.

Ninth, we have striven to resolve imbalances and insufficiencies in development. At the 19th CPC National Congress in October 2017, I concluded that the principal challenge facing our society had evolved into the gap between imbalanced and insufficient development and the people’s growing expectation for a better life. I noted that this represented a historic shift that could affect the whole development prospect.

Tenth, we have worked to deliver high-quality development. At the 19th CPC National Congress, I pointed out that China’s economy was transitioning from rapid growth to high-quality development, in order to address the principal challenge now facing our society and implement the new development philosophy.

Eleventh, we have endeavored to modernize our economy. As I said at the 19th CPC National Congress, this is both an urgent requirement for getting us smoothly through this critical transition and a strategic goal for China’s development.

Twelfth, we have moved to create a double development dynamic with the domestic economy as the mainstay and the domestic economy and international engagement providing mutual reinforcement. I put forward this strategy on April 10, 2020 at a meeting of the Central Commission for Financial and Economic Affairs.

Thirteenth, we have adopted a holistic approach to development and security. At a group study session of the Political Bureau on May 29, 2015, I emphasized security-based development. On January 18, 2016, at a study session for principal officials at the provincial and ministerial level, I analyzed the risks and challenges we faced in four fields on the path of open development. On January 5, 2018, at a study session for members and alternate members of the newly elected CPC Central Committee and principal officials at the provincial and ministerial level, I listed 16 risks in eight fields that required our full attention. On January 21, 2019, we held a special study session for principal officials at the provincial and ministerial level on worst-case scenario thinking, to forestall and defuse major risks. At the opening ceremony of that study session, I examined major risks in the political, ideological, economic, social, and scientific and technological domains, and in China-US trade friction, in foreign affairs, and within our Party. I also set out clear requirements for preventing and resolving such risks, and emphasized the need to stay keenly alert to “black swan” and “gray rhino” incidents.

In reviewing this course of events, I wish to underline the paramount importance of the new development philosophy among the key theories and concepts on economic and social development that we have put forward since the 18th CPC National Congress. As a systematic framework, the new development philosophy addresses a series of theoretical and practical questions regarding our development goals, drivers, methods and pathways, and defines the key political parameters, including our stance, values, and model and path of development. The whole Party must apply the new development philosophy in full, to the letter and in all fields. To this end, we should adopt the following approaches in its implementation:

First, we need to understand the fundamental aim of the new development philosophy.

As an ancient Chinese statesman observed, “In a country, the people are the most important.” The people represent the most solid foundation and the greatest source of strength for our Party in governing the country.

Working for the wellbeing of the people and the rejuvenation of the Chinese nation is the immutable aim of our Party in leading the modernization drive. It is the ultimate goal of all our work, and also the root and essence of the new development philosophy. We will gain a sound understanding of development and modernization only if we follow a people-centered approach and adhere to the principle that development is for the people and by the people, and that its benefits are shared by the people.

The Soviet Union was the world’s first socialist country and once enjoyed spectacular success. Ultimately, however, it collapsed. One main reason for its failure was that the Communist Party of the Soviet Union became detached from the people and turned into a group of privileged bureaucrats who only served their own interests. Even in a modernized country, if the party in power turns its back on the people, it will imperil the fruits of modernization.

Realizing common prosperity is more than an economic goal. It is a major political issue that bears on the foundations of our Party’s governance. We must not allow the gap between rich and poor to get any wider – where the poor keep getting poorer while the rich continue to grow richer. We cannot permit the wealth gap to become an unbridgeable gulf. Of course, we must pursue common prosperity in a progressive manner, giving full consideration to what is necessary and what is possible and adhering to the laws governing economic and social development.

At the same time, however, we cannot afford to just sit around and wait. We must be proactive about narrowing the gaps between regions, between urban and rural areas, and between rich and poor people. We should promote all-round social progress and well-rounded personal development, advocate social equity and justice, and ensure that development offers greater benefits to all the people in a fair way. We should see that our people have a stronger sense of gain, fulfillment and security, and make them feel that common prosperity is not an empty slogan, but a concrete fact that they can see and feel for themselves.

Second, we need to stay problem-oriented in implementing the new development philosophy.

Today, China stands at a new starting point in development, which requires us to employ a problem-oriented approach so that we can apply the new development philosophy with greater precision.

We need to effectively address imbalances and insufficiencies in order to improve the quality of our development. For example, many obstacles are impeding our progress towards greater self-reliance in science and technology, which is essential to China’s survival and development. Another problem is how to narrow the wide development gap between urban and rural areas and between regions. The answer calls for extensive and in-depth research into many new issues. In particular, we need to intensify our research, and come up with clear ideas about how to manage disparities and restructuring in regional development, accelerated population migration across regions, and a lower desire among rural residents to settle in cities.

There is a broad consensus about promoting a green transformation in every aspect of economic and social development. However, our energy system is still heavily reliant on coal and other fossil fuels, which puts a great strain on our efforts to realize a green and low-carbon transformation in our production models and ways of life. The targets of achieving peak carbon dioxide emissions by 2030 and carbon neutrality by 2060 are formidable.

Given the backlash against economic globalization and the complex and volatile international environment, we need to strike a good balance between strengthening self-reliance and pursuing openness and cooperation, between participating in the international division of labor and safeguarding national security, and between introducing foreign investment and conducting security reviews, so that China can open wider to the outside world without prejudice to its national security.

In short, at the new development stage, we need to expand our understanding of the new development philosophy, so that we can take more targeted and more concrete measures that will truly deliver high-quality development.

Third, we need to be mindful of potential risks.

“Prior planning prevents pitfalls and proper preparation preempts perils.” As the principal challenge in our society has changed and the global balance of power is shifting, China will have to contend with more internal and external risks. We must be more aware of potential dangers, have plans in place to counter worst-case scenarios, and prepare for more complex and graver challenges.

The Central Committee prioritized issues of security in its Recommendations for Formulating the 14th Five-Year Plan for Economic and Social Development and Long-Range Objectives Through the Year 2035. It advises that we ensure security in all areas and throughout the process of China’s development. If our security foundations are unstable, our development will be precarious. We should uphold political security, the safety of the people, and the interests of the nation as an indivisible whole. We must have the courage and capacity to meet challenges, and build up our strength to deter threats.

We should prevent drastic fluctuations in the macro economy and avoid excessive foreign investment inflows or outflows in the capital market. We must ensure the security of food, energy, and key resources, as well as the stability and security of industrial and supply chains. We need to prevent the disorderly expansion and unchecked growth of capital, and ensure eco-security and workplace safety. We should guard against the risk of large-scale job losses, improve public health security, and effectively prevent and handle incidents of social disturbance.

In strengthening the institutional framework for safeguarding national security, we should draw on the experience of other countries, work out how to establish appropriate safeguards where necessary, and identify effective solutions for a range of national security issues.

* Part of the speech at a study session on implementing the decisions of the Fifth Plenary Session of the 19th CPC Central Committee, attended by principal officials at the provincial and ministerial level.

(Not to be republished for any commercial or other purposes.)