The COVID-19 pandemic has brought about severe economic consequences beyond just the spread of the virus. In March 2020, COVID-19 shut down most businesses in the service sector, and with one-third of the world’s population under lockdown, economic activity decreased significantly, causing the largest global recession in history. Significant reductions in income, a rise in unemployment, and disruptions in the transportation, service, and manufacturing industries have contributed to the widespread economic downturn.
Every five years since 1953, China has released a 5-year plan composed of social and economic development initiatives that include mapping strategies for economic development, setting growth targets, and launching reforms. 2021 will mark the 14th five-year plan China has released throughout its recent history. The plan has not yet been released however it was broadly outlined in October 2020, marked by less ambitious growth and economic targets. The plan was constructed bearing in mind the worsening of relations with the United States, and more importantly, the incalculable effects of the COVID-19 pandemic, which caused the Chinese economy to shrink for the first time in 44 years.
The era for high growth rates seems to be over for China, as the focus has been shifted to debt reduction and structural reform. The fiscal response for fighting the health and socio-economic implications of the COVID-19 pandemic has resulted in a larger budget deficit than anticipated, which China aims to lower over the span of the next 5 years. Future growth will largely be based on domestic consumption of goods and services. This holds the potential to be valid for many countries around the world as the ongoing pandemic has reshaped economic systems built on globalization. Trade served as a potential catalyst for the rapid spread of the virus and has been significantly reduced ever since. The 5-year plan provides the first insights into how the Chinese view on trade will continue in the future, as the state seems to turn inwards somewhat in order to be more self-dependent. Moreover, the pandemic has highlighted severe inequalities among the rural and urban population, pertaining to living standards as determined by access to healthcare, education, and the quality of livelihoods. Higher infection and mortality rates have been observed in disadvantaged communities. The plan aims to minimize the discrepancies between the living standards of these populations by focusing on strengthening the healthcare system.
Additionally, the 2021-2025 plan has aggressive goals on sustainable energy and lowering carbon emissions. With increased individual methods of transportation such as limited use of public transportation, carbon emissions will increase in the long run; and countries need to act upon this.
Moreover, since the outbreak of COVID-19, biomedical waste generation has increased globally. For example, in Wuhan, 240 metric tons of medical waste were produced every day from March 2020 to June 2020, compared to 190 metric tons produced pre-pandemic. China aims to allocate a portion of its annual budget towards cleaning landfills and developing safe ways for disposal.
The preview of the 14th 5-year plan has provided a first look into how the economic recovery from the pandemic will be projected, and how current changes in the socio-economic balance of the nation will continue to hold significance in the future.
Edited by Zachary Beresin
Kibel Aker is a first year student at McGill University and is currently double majoring in Economics and International Development Studies.