CHINA (2011-16)

CHINA'S NEW FIVE YEAR PLAN: WHY IT MATTERS

Clayton Reeves

Seeking Alpha, March 1, 2011

Chinese Premier Wen Jiabao recently revealed the numbers behind China’s twelfth five year plan. In its most recent incantation, the plan shifts from a target of 8% annual growth to a more reasonable 7%. The 7% number is focused on stimulating domestic consumption, raising the standard of living, increasing environmental awareness and shifting away from an export driven economy. Let’s take a look at some of the things Premier Wen said.

Quality of Growth

Premier Wen Jiabao focused on changing the culture of growth in China from purely growth for growth to a more sustainable structure that would yield benefits for China’s people. He said although growth is booming, he sees disparity between that growth and the impact on the common citizen. Wen said:

In some places, I have seen, urban construction is very fast, but as you walk along, you see shabby rural streets and housing, and some farmers are still hard pressed to pay schools the 100-yuan heating fees for their kids. Therefore, I tell local officials, wouldn't it be better if we construct fewer high buildings and spend the funds for expanding the urban scale on raising living standards?

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