President Hu Jintao yesterday unveiled an ambitious plan for China to
double its per-capita income by 2020. China's per capita income stood at
US$4,260 in 2010, close to Jordan and Thailand, and less than one-tenth of the
US's $47,140. The Chinese leader was speaking at the Communist Party Congress,
which will run until November 14 and will pick the fifth and new generation of
Chinese leaders.
The target of higher per capita
income reflects China's aim to catch up with the high living standards of the
West, and to reduce social tensions by providing higher incomes for the
populace. But the more ambitious goal is for China to rise and challenge -
financially, economically and politically - the Western domination of this
planet over the past several hundred years.
Xi Jinping, designated as the
party's next general secretary, will head the next generation of leaders. Mao
Zedong led a people's revolution and turned China into a communist country.
Deng Xiaophing charted a dual track policy of economic reform while retaining
the communist regime. "It does not matter whether a cat is white or black
insofar as it can catch a mouse," was one of his famous sayings.
Jiang Zemin laid down the ideal
that leaders should not only represent the Communist Party, the grassroots
people and the workers, but the Chinese people as a whole, of all classes.
Hu Jintao embraced scientific
progress as a means to modernise China. The torch is now being handed over to
Xi.
The new president will face the
daunting task of leading China over the next 10 years. And he will meet his
match in US President Barack Obama, who has just won re-election for a second
term. Obama no longer hid his cards when - during his debate on foreign policy
with Mitt Romney - he said that China was the main reason the US would be
shifting its military focus to the Asia-Pacific region. He said he wants to
show China that the US remains a Pacific power.
Xi is likely to undertake several
crucial tasks at the same time once he settles into high office.
First, he is likely to direct
China's economic policy toward more inclusive growth. The great Chinese export
machine is losing steam. Europe no longer has purchasing power. Trade relations
with the US are deteriorating. China needs to keep its giant economy growing
through domestic demand.
Second, China will try to offset
its export markets in the developed economies by expanding trade in the vast
Asian continent, which still enjoys some economic dynamics.
Third, China will look for the
right opportunity before turning its yuan into an international reserve
currency. In doing so, the yuan will become part of a new regional financial
architecture.
Fourth, China will look forward
to further beefing up the Shanghai Cooperation Organisation, the little-known
economic grouping whose members consist of China, Russia and the former states
of the Soviet Union. Soon India, Pakistan, Iran and other countries will be
joining the group.
Fifth, Asean will be pivotal to
China's tie-up. Asean is currently a dollar bloc. China would like to turn the
region into a yuan bloc, and encourage the regional grouping to reduce its
traditional alliance with the West.
Sixth, China will be
strengthening its military forces at full steam, and will be prepared for any
attempt by the US at encirclement.
There will be no honeymoon period
for Xi, nor is there time for him to relax. The global powers are destined to
confront each other against a new geopolitical backdrop.
Thanong Khanthong
Business & Investment Opportunities
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