New strategy soon to bolster development

China must come up with a national strategy to deal with the changes in industrial, supply and value chains and look to capitalize on the development opportunities arising from the new round of technology revolution and industrial transformation, said a new report submitted to the Standing Committee of the National People's Congress on the preparations for the 14th Five-Year Plan (2021-25).

The NPC Financial and Economic Affairs Committee said in the report that China should foster deep integration of the digitalization and the economic development as well as industrial upgrading, putting the development of manufacturing into a prominent position and reducing taxes and fees to lighten the burden for enterprises.

More efforts are also needed to foster a market-oriented and world-class business environment governed by a sound legal framework, strengthen the protection of scientific innovation and intellectual property rights, open up wider to the outside world and gain a competitive edge in the global competition, the report said.

China should work harder to build a new model of development in which domestic economic networks play the primary role, and domestic and international economic networks complement each other, it said.

Cui Fan, a professor at the School of International Trade and Economics of the University of International Business and Economics in Beijing, said the new model of development will promote a higher standard of opening up, advance trade and investment liberalization and facilitation and promote the building of an open global economy amid the mounting uncertainties both at home and abroad.

"To fully give play to China's competitive advantages of its ultra-large domestic market and the huge domestic demand, we need to deepen the supply-side structural reforms and build a transparent, efficient and fair business environment," Cui said.

China is now transforming from the phase of rapid development to a new stage of high-quality development and shifting its focus to nurturing technological innovation and further opening up its economy.

The new report suggested the country should continuously deepen reforms and opening-up, saying the country should be more resolute in furthering reform and China's opening-up will continue on a larger scale and at a deeper level.

Cheng Shi, chief economist of ICBC International, said that deepening market-based reforms and further opening-up will be the fundamental goal of China's future development policies as it will help accelerate the country's industrial and consumption upgrading and further improve its economic structure and growth quality.

The dual-cycle development pattern proposed by the central leadership is in line with China's effort to push for high-quality development and adapt to the evolving global system with China's own growth pattern, Cheng said in a research note.

"Further opening-up will not only help lift China's role in the global value chain but will also allow the country to better participate in the global governance which is crucial for the development of the global economy," Cheng said.

Yang Chengzhang, chief economist with Shenwan Hongyuan Securities, said in a research note that the new five-year plan should make breakthroughs in market-based reforms in areas including land, human resources, capital and technology.

Market-based reform in resource allocation is critical for China's high-quality development as it will help better unleash the potential of market players and companies and further improve the country's business environment, Yang said.