The Xi Doctrine Zeros in on “High-Quality Development” for China’s Economic Future

Damien Ma

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While the Strait of Hormuz crisis roiled the global economy, Chinese President Xi Jinping was putting his imprimatur on China’s economic and social blueprint. On March 12, the National People’s Congress approved China’s fifteenth Five-Year Plan, which covers this year through 2030. Central to the plan—Xi’s third as president—is the elevation of “high quality” development that approximates a “Xi doctrine” on the economy. The term is pervasive in the latest plan, appearing at least 50 percent more than in the previous iteration. It has clearly become an organizing principle associated with Xi himself, making its significance as much political as it is economic.

In many ways like a large corporation, China operates on five-year planning cycles that also overlap with its five-year political cycles. The plans are painstakingly put together across multiple government agencies over at least two years and reflect the top leadership’s political mandate. Once the plan is out, China aims to stick with it and marshals the entire bureaucracy and provinces to execute, with the intent of minimizing major corrections within the timeframe. Though the plan is sufficiently flexible to allow for adaptation to local conditions, every level of government is expected to execute within the parameters of the plan—their performance and political prospects depend on it.

Xi has attempted to reset the Chinese economy for years now with mixed success. First, he took the controversial step to water down the importance of the GDP target in the fourteenth Five-Year Plan, then he forced a rapid correction in the property market a couple years later that surprised many. Shortly after, he followed with a crackdown on China’s big tech companies that spooked investors. Throughout his tenure so far, Xi has repeatedly withheld major stimulus—to the frustration of markets.

Of course, resetting the Chinese economy isn’t simply a matter of having optimal policies. China has plenty of policies that are diligently read and analyzed by many. But the gap between what’s in a plan (what Beijing says) and what actually gets realized (what the rest of China does) is a political economy problem, not a policy one.