China's 13th 5 year plan

Officially they're still communists and thus favour central planning.

What's the question, comment?

Reply to ssu Have you ever seen a 5 year plan presented in such a neoliberal manner? Anyways, what do you think will be the focus of this one, as far as the direction they would be moving towards?

Not my favored reading, actually. And reading the actual 5-year plan it might be very difficult to see where the actual interesting emphasis is. I haven't followed so much Chinese politics, but I assume the real problem is how and what to do with the economy and especially with the debt laden financial sector. That it's mentioned (at least on the Xinhua article) is totally understandable. The primary objective for China is to avoid a US-style Financial Crisis with collapsing real estate prices. They've been successfull, even if the stockmarket has been on a roller coaster ride.

Because now a lot of that growth hasn't been through exports, but through a historical gigantic infrastructure program. That program is obviously showing that it's not allways so productive (with now there being a huge number of vacant flats, buildings and cities). And the debt has just grown to huge proportions.

The obvious solution would be to transfer from an export lead growth to an domestic lead growth and put a focus on growing of the middle class. Chinese are still poor, even if they aren't starving. That's not actually so easy to do.

Here is CCTV's take on it. Basically, boost consumption is the name of the game, as long as GDP increases, they are in the clear. But is that all? Seems boring.

The government's credibility and hold on power is inextricably linked to GDP growth, and not just the central government's but regional governments' and their leaders' too. If growth drops, heads will role. So, I would expect continuing attempts to transform China into a land of infantile consumers, afraid of any real engagement with life beyond the next episode of the local version of Eastenders, or news on the latest iphone release.

The Communist Party understand basically that the people will accept it when there is economic growth. They portray, not perhaps directly but by indirectly, the scenario that if it wasn't for them, China could collapse in serious political upheaval and crisis, and hence they are the only thing holding China from this kind of collapse. Partly they are correct: with economy growing people aren't on the streets en masse and accept the Communist Party rule. And yes, with democracy some Tibet might decide to go. Yet the idea that without the CP the country is going fall into dissarray is nonsense.

The biggest obstacle is of course the demographic trap that China has created with the one child policy. What they ought to have understood is that with economic growth and higher living standards population growth will decrease. Singapore had similar ideas of population growth being a problem for the city state, and now desperately wants Singaporean women to have more babies. Now the strict one child policy (that has now been lifted, but too late) has created a real problem for China to face in the next decades. For example, from the CCTV clip given above, I noticed it was said that about 70% of the government's budget goes to welfare programs. If it's now so, how will it be there will be even more elderly and not so many young?

Now what I think is positive for China is that they indeed can plan for the long term (unlike many democracies can do). They have been very successfull. They have avoided a panic crash that has been forecasted to happen for years now. They are well aware of the bubble in housing etc. Unlike the US, where the Federal Reserve and other leaders were totally ignorant about a severe housing bubble, the Chinese understand their problems. And that they have understood this is the crucial thing here. Financial Crisis happen when extreme hubris and denial of any looming problems has affected the thinking of leaders and people believe in a "New Economy".

The Chinese understand that they do have problems. The infrastructure projects may have saved them for this far, but that has come with a price.





And if the Chinese blow it, it's not anything we should be happy about. I remember one financial analyst saying to me: "If China hits a deep Financial Crisis, sell your European stock".

Here is one good video (at least in my opinion) explaining the situation in China

China embraces 3rd Industrial Revolution (ha)

Nobody has anything to gain, really, by China failing. I do wonder, though, whether the predictions about their future may be overly optimistic. The maldistribution of age groups is a problem. Maintaining employment opportunities, along with householder opportunities, is essential if they are to maintain economic growth and social stability. They have some horrendous environmental problems (badly polluted air and water, among them) and climate change will make life difficult in parts of China. Their access to plentiful freshwater is problematic.

HERE is an article in the NYT about the long-term impact of the 1-child policy in China.

There should be, and is, some doubt about the veracity of China's economic figures. (One can, should, and ought to be skeptical about any state's economic reports, predictions, growth targets, and so on.)

A billion plus person economy should be able to float many boats. How long that will take, what the consequences will be locally and globally remains to be seen.

I've always thought a 5 year plan was a good idea. The USA would benefit from planning a ways out into future rather than expecting results every quarter.

Was China's 12th 5-year plan publicized so much as the 13th 5-year plan seems to be?

I continue to see all sorts of news sources talking about the new five year plan. I have no recollection of this happening before, though I don't know if that's just me or if it's actually being reported more now.