efforts are mutually reinforcing and support its strategy of national rejuvenation. The Party gives priority to China’s economic development as the “central task” and frames its economic system as the means of advancing the nation’s overall political and social modernity. In particular, China’s economic targets abroad focus intensely on advancing what the Party calls the country’s “productive forces” (e.g., industry, technology, infrastructure, and human capital) which it views as the means to achieve the country’s political and social modernity—including building a “world-class” military. The party-state’s relentless efforts to grow China’s national industrial and technological base has significant implications for China’s military modernization, as well as for China’s global economic partners.
CCP leaders have cast China’s partial adoption of market features–which were implemented as part of its “reform and opening up” that began in the late 1970s, and subsequently led to an economic transformation–as evidence that their strategy to modernize China has been succeeding rather than viewing the market feature adoption as a repudiation of the Party’s fundamental economic ideals. Party leaders since Deng Xiaoping have consistently rationalized China’s market-oriented economic reforms as a necessary regression from socialism needed to account properly for China’s historical circumstances, which left it significantly underdeveloped. According to the Party, contemporary China remains at the beginning stage or the “primary stage of socialism” with a long process of socialist modernization ahead.
Basic Economic System. The Party conceives of China’s economy as constituting the “basic economic system” in which public ownership is dominant and state, collective, and private forms of ownership develop side by side. The basic economic system comprises China’s public ownership economy and the multi-ownership economy.
Economic Development Goals. Despite slowing economic growth just prior to and during the COVID-19 outbreak, China will continue to pursue the economic policy objectives determined by the CCP Central Committee and set forth in the 14th Five-Year Plan (FYP). China’s economic goals are (1) furthering supply-side structural reform, (2) making China a country of innovators, (3) pursuing a rural vitalization strategy, (4) implementing the coordinated regional development strategy, (5) accelerating efforts to improve the socialist market economy, and (6) making new ground in pursuing “opening up on all fronts.” The PRC is currently executing the 14th FYP that will cover 2021-2025. The priorities and goals in the FYPs not only apply to the government and the public ownership economy, but also serve as implicit guidance from the Party to the multi-ownership economy.
Economic Conditions. Prior to COVID-19, China’s economic growth had slowed because of demographic challenges, declining returns from state-led infrastructure investment, and slowing urbanization. China’s efforts in early 2020 to contain the COVID-19 outbreak with government lockdowns and strict control measures exacerbated this slowdown in China’s economy. In March 2022, China announced an annual growth target of around 5.5 percent, but fell well short and only achieved 3 percent growth for 2022, the second lowest growth on record since 1976.
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OFFICE OF THE SECRETARY OF DEFENSE
Annual Report to Congress: Military and Security Developments Involving the People's Republic of China
