Since China is the world’s largest tea-producing nation, both the 5-Year Plan and the No. 1 Central Document shape the agenda for China’s tea industry in terms of resource allocation and the role of tea in economic development.
THE FIVE-YEAR PLAN
China’s first 5-Year Plan ran from 1953-1957, and 2021 marked the beginning of the 14th 5-Year Plan. Some highlights of the current plan include:
- Economic development. Like the plan before it, a main goal is to further develop domestic supply while also promoting domestic consumption. Initiatives like the Belt and Road Initiative (BRI) will likely impact over 65% of the world’s population and over 40% of global GDP. The flow of trade through the BRI is intended to drive growth and consumption in developing markets. This further aligns with current and previous Plans that aim to eradicate poverty and/or develop rural areas.
- Note: Previous plans have set numeric targets for economic growth as a percentage of GDP. The current plan differs in that it does not. The global pandemic and concerns about China’s massive debt levels are the likely reasons for this omission.
- Global politics and economic trade: tensions have also pushed China to call for greater self-sufficiency in food security, energy, technology, and industry.
- Environmental development: China continues to commit to reducing pollution, including carbon neutrality by 2060.
Since the current Five-Year Plan was released in 2021, the political and economic climate has altered China’s progress along these goals. It is expected that Russia’s war with Ukraine have disrupted global access to energy. Restrictions on Russian oil exports and the urgent need for energy supply has caused experts to question the feasibility of achieving the 2030 Paris Agreement and other carbon neutrality goals. Similarly, political tensions have caused some opponents to counter what they deem “economic coercion” between China and some of its trade partners.
THE NO. 1 DOCUMENT
The No. 1 Document is an annual statement of priority in the development of China’s agriculture and rural affairs. As in previous years, objectives have focused on:
- Rural development: The No. 1 Document re-emphasizes the importance of reducing poverty in rural areas through farmer employment and income. The plan calls for government subsidies, training programs, and other assistance in marketing/developing local agricultural products. Investments in technology, production/processing machinery, and rural infrastructure are also included in the plan.
- Food security: Highlights in this area include further optimizing use of farmland for improved yields, and better water management for the prevention of drought and flood damage.
The concerns and trends expressed in these documents directly impact the Chinese tea industry:
- As a whole, the Chinese tea industry has contributed to the reduction of poverty in 337 nationally designated poverty-stricken counties across 12 provinces. This was achieved by improving tea production areas and developing new ones, mainly in the Western and Central Belts of mainland China.
- Chinese tea production has shifted significantly over the past decades to more rural areas in the Central and Western provinces, areas that are the focus of rural infrastructure development.
- Estimates put about one-third of China’s tea fields having tea plants that are 30 years old (or older). The industry has called for a phasing-out of these plants in favor of younger, more productive plants. This investment in yield optimization may involve digging up old plants or shifting to new fields.
- Water management was an important concern in 2022 for the tea industry, as widespread heat and drought affected many areas across China. Some regions saw significant flooding as storms brought heavy rains over severely parched ground.
These documents are best known for laying out a vision, or guidelines rather than a detailed plan for action. This approach often means that different provincial or other levels of government take initiative upon themselves to best determine the path towards achieving that vision based on their immediate situations. This approach also fosters a kind of competition, as successful implementation is praised as a model for other levels of government to study and emulate.