China's next economic plan a big deal for Australia

File photo of China's President Xi Jinping waiting before a welcoming ceremony outside the Great Hall of the People in Beijing — China's President Xi Jinping waits before a welcoming ceremony outside the Great Hall of the People in Beijing in this May 6, 2013 file photo. Reuters/Petar Kujundzic/Files

It will be a big deal for Australia when China moves to reshuffle its leadership and outline an economic plan for the next five years, given its role as an important trading partner. Shadow foreign affairs minister Penny Wong said that Australia has to “understand China, its motives and its mindsets” because “we don’t yet know how its pursuit of a more ambitious agenda will play out globally” nor “how China intends to condition its use of power.”

Every five years, the National Congress of the Communist Party of China (NCCPC) gathers in Beijing's Great Hall of the People with a select guest list of around 2,300 party elite coming from the military, provinces, bureaucracy and industry. It kicks off with speech from President Xi Jinping on Wednesday.

The speech will be about the latest group-think on China's economy. It will also detail goals and how they will be achieved by 2020 and beyond. About half of the seven-member politburo is expected to be replaced as they could either fall from political favour or head towards tacit retirement age.

Made in China 2025

Made in China 2025 reportedly seeks to splash out around US$300 billion for China to become self-sufficient and a global leader in 10 high-tech industries. Several areas like robotics, biotech, aviation, electric cars and artificial intelligence are expected to be subsidised.

"It also is aggressively protectionist and wholly inconsistent with China's most basic national treatment commitments in its World Trade Organisation agreement," Stevenson-Yang wrote in her J Cap Research commentary. Based on an American Chamber of Commerce survey of its members, more than 80 percent felt less welcome in China and over 60 percent have little or no confidence that the country will open its markets much in the next three years.

ANZ's chief China economist Raymond Yeung said supply-side structural reforms will remain to be a key strategy. "Initiatives like capacity reduction, deleveraging and property destocking will be ongoing through the second half of the 13th Five Year Plan," ABC News quotes Yeung as saying.

The economist noted that fiscal spending has slowed since the 18th NCCPC. He warned that if this trend continues, it may not be great news for the big miners in Australia.

As for jobs, NAB's David de Garis said he was picking 25,000 new jobs, well ahead of the consensus choice of 15,000. That was based on the bank's business survey.