China's 2020 Blueprint to Ripple Through World

After the Communist Party of China (CPC) fleshed out the national goal of building a moderately prosperous society, questions of how the country will fare in 2020 and the impact on the world are very intriguing.

Optimists envisage higher productivity and efficiency and broader democracy. Pessimists warn of domestic social ills which might take a serious toll on the world's second largest economy. Others, with reserved confidence, stay skeptical.

Whatever kind of development trajectory China takes during the coming eight years, the ongoing national congress of the Party, with a new leadership to be installed next week, is a noteworthy event for its potential to change China and the world.

Potential & benefits

With the country's urbanization rate slightly exceeding 50 percent in 2011 compared with 39.1 percent in 2002, Chinese cities will see a constant influx of rural migrants in the next decade. This will generate demand for infrastructure and public utilities.

China's growing appetite for energy and raw materials is expected to give a kick to the world's sluggish bulk commodity market. Currently, China is the world's biggest consumer of aluminum, cooper, iron ore and cotton.

Ungad Chadda, senior vice-president of Toronto Stock Exchange, a world leader in mining and energy financing, takes China's 2020 blueprint as good news and is fascinated at the buildup of infrastructure under Chinese leaders.

Other market-moving elements relating to China's 2020 goal, Chadda said, include the emerging middle class and Chinese people's growing consumption power.

Morgan Stanley China has projected a golden decade for China's consumption. By 2020, the country's total retail sales will be equivalent to two-thirds of that of the United States and will account up 12 percent of the world's aggregate, it said.

For many Chinese people, the global market is no longer a vague concept.

Ge Haoxin, a delegate to the Party congress from Fuyang city in East China's Anhui province, believes that his seed-breeding business can contribute to the stabilization of the world farm produce market.

Following bumper harvests for eight consecutive years, China has witnessed an unusual spike in grain imports this year, triggering market speculation on its growing dependence on the world market.

From January to September, China's cereal imports (rice, wheat, corn and barley) more than doubled to 11.43 million tonnes, adding the total volume of farm produce imports to US$83.6 billion, up 24.5 percent from the same period last year.

The deficit in China's farm produce trade rose to US$38.26 billion in the nine months, up 61.9 percent year on year, according to statistics from the Ministry of Agriculture.

Restricted by its growing population and limited arable land resources, China must increase agricultural input to meet rising grain crop demand,industrial analysts say.

China is at a disadvantage compared to other major grain producers, such as Australia, America and Brazil, in terms of per capita arable land and water resources, Ge said.

"If the Party honors its commitment to nurture agriculture with industrial proceeds and facilitate innovation on farming technologies, I think we can contribute more to domestic grain supply and the stability of the world farm produce market," said Ge.