This podcast is based on my Long Read Article for March 16th 2025
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TRANSCRIPT
Hello I’m Bryan Bruce on the 20th of March 2025
We hear a lot in our news about what’s happening in the USA and especially what President Donald Trump is up to. What isn’t reported, anywhere near as much, is what’s happening in the land of our biggest trading partner and the second biggest economy in the world - The People’s Republic of China.
With Trump alienating former trading partners and sending the message to its allies that the USA can no longer be relied upon as a defence partner,I decided to read the speech General Secretary Xi Jinping gave to the recent National Congress of the People’s Republic to try and get a bead on what we might expect from China in terms of its economic policy.
Let me start by saying that this isn’t a piece about the pros and cons of the Chinese system of government. There’s a lot more to the autocracy verses democracy debate than just economics. It’s about the ability of their one party system to do long term planning in a way that eludes democracies like ours, with our vote you- in- vote -you -out system every 3 years.
China’s been governed by one party-The Communist party- for the last 76 years now, and there are commentators who will tell you the reason their economic and foreign policy isn’t covered as much in our news, is because the Chinese government isn’t transparent. But that’s not entirely true, because every 10 years the Chinese leadership broadly signals to its people and the world what it’s key policies are going to be for the next decade.
If we just take a look back at what they said their industrial strategy was going to be 10 years ago, they said they would try to dominate the world of renewable energy, batteries, and electric vehicles; that they would focus on computer chips and shift towards tech based development such as AI and quantum computing. When you add all that to the One Belt One Road Initiative then clearly they didn’t have a secret plan. It was all very formally laid out and largely carried out.
So what is their stated plan now?
Well, in July last year China’s Central Committee ( who are elected by Congress) held its Third Plenary session –a closed-door meeting presided over by Xi Jinping, in which they set their plans to 2035.
2035!
Imagine that! We can’t plan ahead beyond our next election in 2026 never mind a decade from now.
But, moving on.
In early March, in his opening speech at the National People’s Congress, General Secretary Xi Jinping, set forth the agreed long- term strategic blue print for China to “ navigate its development in a rapidly changing, volatile and unpredictable world.”
Much of it was about China becoming self-sufficient. He emphasized, for example, how the rights of farmers needed to be protected from real estate development encroaching upon fertile agricultural land, because food security will become increasingly important in an increasingly uncertain world.( Compare that policy by the way with what we have been doing in Pukekohe where some of the most fertile land in our country has been getting gobbled up by urban sprawl.)
In general, Xi announced, the intention now would be to focus on producing quality rather than quantity, to move away from lower-level manufacturing of cheap products towards quality products, along with an emphasis on the digital economy.
He also made clear that the future of State Capitalism wasn’t up for debate.
While the importance of private companies for China’s economic growth was recognised, it’s clear there would be no deviation from the path of state control of the business environment.
Private companies are to be seen as corporate citizens with responsibilities to the State.
As an example, you may recall how Chinese entrepreneur Jack Ma, of Alibaba fame, who was reined in because the government did n’t want Tech giants like him controlling the economy. How different is that to the situation on the other side of the Pacific where Musk, Bezos, Zuckerberg, and Thiel technocrats are pulling many of the strings at the White House.
From his speech to the National Congress it’s clear that the Chinese leadership see their country in a structural competition with the USA, which is actively seeking to contain China’s rise, most obviously in the area of technology.
So again, self-sufficiency is the aim, with the Third Plenum seeking to have fully Chinese-controlled supply chains for integrated circuits, machine tools, medical equipment, instruments, software and advanced materials with manufacturing set to remain around 25-30 % of GDP.
The promotion of Science is seen as the key to competition with the USA ..so the Chinese Leadership has told its educational institutes and universities, that they have to expand programs that teach “urgently needed” skills and focus on nurturing “strategic scientists” in specific fields, from both inside and outside of China.
And It’s fair to say I think, that Beijing’s intention to strengthen China’s self-reliance will only intensify now the second Trump administration is creating such uncertainty about global trade and supply chains.
Quite how this will all impact on New Zealand is too early to say, but if you are an exporter faced with the choice of dealing with a country with a stable administration or a volatile one that talks up tariffs, which would you choose to deal with?
So let me finish this brief summary by returning to what I said at the start.
Whatever you may think of the merits or otherwise of China’s authoritarian system of government, their ability to set 10 year targets and implement them , is an economic advantage that democracies around the world, including our own, need to somehow find a way to match.
Thank you for listening . To find my fuller opinion piece on China’s stated intentions please visit my Substack bryanbruce.substack.com
That’s Bryan with a y Bruce. substack.com
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