(Yicai) Nov. 5 -- The fourth plenary session of the 20th Central Committee of the Communist Party of China has reaffirmed the target of having the same per capita gross domestic product as a moderately developed country by 2035 and urged China to make more efforts to expand consumption and foster new momentum.

The Goal

What is a moderately developed country? According to the definition on the website of the Ministry of Foreign Affairs of China, countries such as Greece, Portugal, the Czech Republic, and Hungary are moderately developed countries. Hungary, with a per capita GDP of USD23,000, serves as the watershed.

Based on the International Monetary Fund’s criteria to classify developed economies, the threshold for a moderately developed country is even higher, roughly at the level of Slovenia, which ranks around 34th globally with a per capita GDP of about USD33,000.

China ranked around the 70th spot worldwide with a per capita GDP of about USD14,000, which means the country must achieve akin to an economic miracle, finishing a marathon at the speed of a 100-meter dash, if it wants to become a moderately developed country by 2035.

Growth Engines: Expanding Domestic Demand, Fostering New Growth Drivers

The key to expanding domestic demand lies in enabling young people to feel secure in consuming. A feasible and effective suggestion is to issue special treasury bonds to gradually increase the basic pension for elderly citizens in rural areas to CNY1,000 (USD140) per month from less than CNY200 (USD28).

According to statistics, the parents of over 70 percent of Chinese born in the 90s still have rural household registration. Increasing rural pensions can significantly alleviate the burden of supporting the elderly for young people, enabling this major group to purchase high-value consumer goods, such as new energy vehicles and smart home appliances.

Fostering new growth drivers involves three aspects: upgrading traditional industries, developing emerging industries, and making forward-looking plans for future industries.

For the upgrading of traditional industries, China should achieve full supply chain empowerment and equip all industries with artificial intelligence brains and green hearts.

The goal of developing emerging industries consists of building world-class industrial clusters for NEVs, photovoltaics, and energy storage, and exploring emerging fields, such as humanoid robots, the low-altitude economy, and the metaverse.

Future industries focus on cutting-edge technologies, such as quantum computing and controllable nuclear fusion. These technological reserves will determine China’s competitiveness in the next decade.

New Opening-Up Pattern

In addition to fostering internal growth engines, China also needs to further open up to the outside world.

China’s opening-up initially focused on attracting foreign investment and taking orders for production. Now, the country aims to participate in and even lead the formulation of international rules, standards, and regulatory systems, becoming not only a player but also a referee.

Faced with the noise of trade protectionism, China should firmly uphold multilateral trade and sell more made-in-China high-tech and green products to more global destinations to achieve a dual improvement in market and products.

China should also vigorously promote its entire supply chain to go global in the next five years, especially in high-tech, green energy, digital infrastructure, and other fields in which the country excels, and turn investment into international influence.

In conclusion, the goal for 2035 is a highly challenging test that requires China to play several roles simultaneously: a filial child (pension reform), a top-notch engineer (developing new quality productive forces), and a shrewd international player (high-level opening-up).

This road will not be smooth, but the strategic direction is crystal clear.

The author is Qu Hongbin, vice chairman of the China Chief Economist Forum and former chief economist of Hong Kong and Shanghai Banking Corporation China.

Editors: Dou Shicong, Futura Costaglione