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China’s economy set for quantum leap forward

Central Committee meetings of China’s Communist Party don’t make plans. They reveal plans long in maturation. The four-day Central Committee meeting that ended Tuesday only offered a sketch of a five-year plan centered on high-tech self-sufficiency and a shift toward the domestic market.

But enough details of China’s economic goals are known to piece together a picture of an economy taxiing towards take-off. Call it the quantum leap forward.

Embedded in the five-year plan are a web of new technologies and financial reforms designed to transform manufacturing, transportation, health care and finance, powered by a domestic semiconductor industry that will challenge American dominance in the industry. China already has launched a set of new technologies that the West hasn’t begun to deploy.

These include remote sensing of vital signs for epidemic control, predictive AI algorithms to pinpoint possible “superspreader” events, digital payments (including an official digital currency) that will replace conventional banking, and self-programming industrial robots that can design their own production processes.

China’s edge over the West, though, doesn’t come from superior technology. China’s economic takeoff stems from what Nobel Laureate economist Edmund Phelps calls “mass flourishing” – the willingness of the whole population to embrace innovation. China’s plan will push disruptive new technologies into the grassroots of the economy, transforming daily life in several ways.