Toward Sustainable Growth in the People's Republic of China: The 12th Five-Year Plan

Abstract

Critical among the objectives of the 12th Five-Year Plan is changing the growth pattern toward a more services- and consumption-driven model, away from the past emphasis on industrial production, capital investment, and exports, which is necessary to address the social, environmental, and external imbalances of the People's Republic of China. Rebalancing is unlikely to occur in the absence of bolder policy adjustments. Some key policy areas requiring attention include shifting the emphasis of public spending from investment to public services, further finance sector liberalization, greater private sector participation in the economy, and fiscal reform to reduce income inequality and strengthen local government finances.