ABSTRACT
It is easy to sing the praises of China’s economic performance. An average annual GDP growth rate of 10 percent during the 1978-2006 period has raised GDP per capita almost ninefold over the period. The prevailing expectation in 2006 appeared to be that China would continue to register impressive growth for some time to come. This optimistic outlook is captured in a December 2005 report by Goldman Sachs2 which predicted that China’s GDP would surpass that of the United States in 2040 even after assuming that China’s GDP growth rate would slow down steadily from its average annual rate of 10 per cent during the period 1979-2005 to 3.8 per cent between 2030 and 2040.3
Since a common dictum of men of practical affairs is “if it ain’t broke, don’t fix it,” it was therefore a surprise when the Sixth Plenum of the Sixteenth Congress of the Communist Party of China (CPC) in October 2006 chose not to follow this route despite the optimistic prognosis from “smart money” (exemplified by Goldman Sachs) that China was on track to even greater prosperity. Instead of repeating what every Plenum had proclaimed since the famous Third Plenum of the Eleventh CPC Congress held in December 1978, that the chief task of the CPC was economic construction, this 2006 Plenum proclaimed instead that the chief task of the CPC was the establishment of a harmonious society by 2020.
