Special Report

Beautiful China: Policy shift underpins nation’s economic future

by Shaun Cochran / May 10, 2018

SHARE

Considered through a Chinese Marxist lens, “Beautiful China” is such a profound change that the concept warranted amendment of the Chinese Constitution. Prioritising growth at all costs has ended: the focus has shifted from an emphasis on quantity to quality. With central-government air cover, environmental-protection officials are wielding a dramatically upgraded arsenal of rules and regulations. Support for clean energy and electric vehicles (EV) will not waiver, and fears of saturation in waste management should continue to prove unfounded. EV, waste-management and gas plays stand out as the top beneficiaries of this new era.

So important, it warranted changing the constitution

In previous Party documents, President Xi Jinping’s predecessors vowed to build a China that is ‘prosperous and strong, democratic, culturally advanced, and harmonious’. Xi introduced another word: adding the “Beautiful” China concept to the Party Constitution. Understood within the context of the Chinese Marxist political lexicon, these words mark a significant shift in direction. The country is at a turning point, after more than three decades of high growth.

Shift from quantity to quality of growth

Prioritising growth at all costs has ended. China is shifting its focus from quantity of growth to an emphasis on quality. This will transform its economic relations with the rest of the world. Imports of primary products will fall. Along with slower growth, this will weaken commodity prices. China will move from being a supplier of semi-manufactured products to being a consumer. Absent other triggers, Sino-US and Sino-EU trade tensions should ease, and tourism will continue to grow.

Policy commitment matched by much stronger regulators

With central-government air cover, environmental-protection officials have been able to make full use of their dramatically upgraded arsenal of regulations. Previously, they were mostly firing blanks. Support for clean energy and electric vehicles will not waiver even as development runs up against entrenched interests in China’s sprawling old-energy economy. Also, fears of saturation in waste water and waste management should continue to prove unfounded.