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China’s Five Year Plan (FYP)

Economic Rehab Period19501952
1st Five-Year Plan 19531957
2nd Five-Year Plan 19581962
3rd Five-Year Plan 19661970
4th Five-Year Plan 19711975
5th Five-Year Plan 19761980
6th Five-Year Plan 19801985
7th Five-Year Plan 19861990
8th Five-Year Plan 19911995
9th Five-Year Plan 19962000
10th Five-Year Plan 20012005
11th Five-Year Plan 20062010
12th Five-Year Plan 20112015
13th Five-Year Plan 20162020
14th Five-Year Plan 20212025
Despite superficial similarities — in particular the precise targets and terse edicts for policy outcomes — the Five Year Plan has fundamentally transformed since the early 1990s, and has long abandoned its role dictating economic and social behavior. Though once wedded to socialist economic planning, and therefore inherently a tool of the command economy, the modern planning system is now highly flexible, and is used to support increasingly diverse initiatives.

China’s Five Year Plan (FYP) is not actually a single, coherent plan, nor is it even fully contained within a discrete five-year period. Rather than a static policy blueprint, the Five Year Plan is better thought of as an evolutionary planning and policymaking process. It is a dynamic institution for systematically bringing information up from the grassroots to the central government, processing and analyzing that information to support policy decisions, delegating and coordinating the implementation process across the bureaucracy, and then monitoring the effectiveness of those policies — and the officials who implement them.

It is also a political tool that strengthens the hand of central leaders, who use the planning system to shape the priorities and incentives of diverse ministries and local governments. Yet the Five Year Plan is actually designed to preserve the high degree of institutional leeway and local autonomy that typifies China’s highly decentralized government. Arguably, central planning reinforces the system of tiered control and central oversight that ensures Beijing has ultimate control over key policy parameters, but without over centralizing decision-making power or micromanaging local officials.

The first official document in the FYP cycle is the Communist Party’s brief, fairly general “Guidelines” approved at a plenary session of the Central Committee in the fall before the first year of the plan. This document solidifies the strategic consensus of the CCP just after the midpoint of the party’s five-year political cycle, which means the plan is offset from the leadership transition and therefore ensures a degree of continuity across administrations. The State Council then drafts the “Outline,” which is approved by the National People’s Congress the following spring. This document — commonly cited as China’s Five Year Plan — clarifies objectives and points to individual policy strategies, but remains fairly vague. A parallel process of Guidelines and Outlines ensues among local governments over the same time period.

Later in the first and second year of the plan cycle, the individual paragraphs or targets in the national and local plan Outlines are then used as the basis for the real core of the FYP system: hundreds of sub-plans that contain the first level of practical detail on how the main objectives of the new five-year plan outline are to be realized. These plans provide individualized regional targets tailored to local conditions and resources, define the general parameters of policy strategies, and set initial guidance for how progress will be measured and evaluated—sometimes a contentious process arbitrated by the State Council and CCP bodies. Finally, government departments at all levels must still develop a series of “work programs” and “implementation programs” that contain the level of specificity needed to allocate resources and adjust procedures and regulations. It is only at this point, after thousands of provinces, cities, and counties have produced supporting initiatives, that individual policy programs are mature enough to implement nationally.

This creates a nested web of plans, found in almost every single policy domain in China and across the three core levels of the state: the center, provincial-level governments, and counties and county-level cities — which, not coincidentally, correspond with CCP supervision and authority structures. This system of sub-plans has become increasingly institutionalized since the 11th FYP, and central ministries are reducing their direct role in managing projects, except in cases where there is a clear reason for an active central program, such as cross-regional issues or national defense.

Instead, national plans set general strategies and outline the content of a policy plan, but leave many details and management functions to local governments. These local departments are the locus of most policy implementation and have substantial leeway over issues not specified in the national plans—and very often reinterpret or reprioritize the content of their instructions. Importantly, many of the key policy documents that translate Five Year Plan strategies into practice are not explicitly identified as subcomponents of the plans that mandated their creation, which helps obscure the sustained coordination process in the planning system.

In general, the large, national thematic sub-plans are released in the first year of the plan, and the follow-on implementation documents following the second and third year. Fiscal support measures and evaluation procedures often lag even further, meaning that the full web of national and local policies is generally only complete in the latter half of the plan period. This delay is particularly acute for programs that require new regulatory, institutional, or fiscal support structures, such as social welfare programs or environmental monitoring.

One feature of this lagged process is that local governments and ministries are forced to improvise while the details are being finalized. This can produce a degree of chaos, fueling the impression that Beijing is out of touch with reality on the ground, particularly for difficult or underfunded priorities that local officials might hope to shirk. But it also creates space for China’s distinctive method of policy experimentation and pilot projects, which often precede national plans and are used to inform subsequent implementation details.

Just as these policies are coming into effect, a mid-term review process begins at all levels of government and for most thematic plans as specified early in the planning process. There has been a trend—or at least an aspiration—to involve independent third-party evaluators since the 11th Plan, which has had varying degrees of success. The results of the review process are released in the third and fourth years of the plan, including a formal presentation to the National People’s Congress and local equivalents, and are meant to provide feedback to calibrate initiatives as they mature, spreading successful models and correcting unsuccessful ones. By the time this review process has concluded, the party and state bodies charged with drafting the strategic guidelines of the next Five Year Plan are starting their preparatory work. The assessment of outstanding problems thereby feeds back to the center as the process begins anew.

Though the Five Year Planning system is primarily a mechanism for the state to coordinate and implement policy across central and local bureaucracies, it derives its influence from its role within the Communist Party’s power structures. The modern CCP exerts its control over the political system largely through the management of cadres — the nomenklatura system — which institutionalizes its control over personnel within a tiered central and local hierarchy of party secretaries. The center appoints and monitors all officials at and above the vice-minister and vice-provincial rank, and delegates similar powers to the party secretaries at the provincial level, who in turn make appointments and oversee leading cadre in the counties and county-level cities in their jurisdiction, and so on.

Promotion of local officials in China is a complicated “cadre evaluation” process in the Five-Year-Plan (FYP) framework. The FYPs are a cycle process starting from the release of a series of social and economic development initiatives by the central government, among which many goals are “administratively subcontracted” to local governments. The bureaucratic personnel are supposed to fulfil these directives and be evaluated on these upper assigned tasks and eventually will be promoted or not. Some key characteristics of this process are: (1) the ones getting higher rankings are more likely to be promoted; (2) the strongest promotion incentive is concentrated on the local main leaders; and (3) though subcontracted tasks are numerous, covering most public areas, only economic development (e.g., GDP) is tracked and veto-track factors largely determine the evaluation ranking. A veto means that if the target is not fulfilled, there will definite be no chance for promotion.

This structure creates a concentration of power within the party apparatus at each successive level of government, where party secretaries enjoy immense authority over their subordinates in all state institutions, with few effective checks other than the party institutions above them. This gives them wide latitude to use legal and extra-legal powers as they see fit, and leads to a widely discussed tension between vertical and horizontal authority relationships. On paper, central ministries have policy authority over the corresponding departments in local governments, but the local ministers are also subordinate to their respective party secretaries, who are far more important to their career prospects and budgets than Beijing. In all but a few special cases, namely the military and central bank, the result is that the priorities of the local party leadership trump tenuous vertical institutional linkages.

The Chinese writing style follows the party's direction and makes documents difficult to read. Economic plans tend to be phrased like parables, and in the past they were heavily overlaid with Marxist and Maoist ideology.



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Page last modified: 01-08-2021 14:08:01 ZULU