China has just announced its next five year plan and has set itself a target for growth within that plan of seven per cent. In doing this their central government has shown it is going to concentrate on large infrastructure projects and Fixed Asset Investments and set in place new policies in order to gradually increase consumption.

Their strategy is a threefold plan:

(1) To increase Consumption– It has now been set as a long-term strategic aim for the Chinese government that they intend to try to encourage their Chinese citizens to purchase more goods. This rising of consumption might be tricky though – China has gone through incredible growth from its previous growth modelwhich was always encouraging exports and investments rather than increasing wage growth and household savings. The present five year plan aims for a raised minimum wage, the reforming of income tax and an increase in government-funded welfare projects such as health care and pensions. These are all intended to reduce income disparity.

(2) Going from Made in China to - Designed in China – The present 5 year plan aims at promoting Strategic Emerging Industries. The Chinese no longer want to be viewed as the world’s factory and instead want to go into much higher valued sectors like alternative energy vehicles and biotech. 

(3) Greening their 5 Year Plan – The current plan is China’s greenest 5 year plan and it includes a bunch of measures that will guarantee a clean and reliable energy supply in addition to cutting down the pollution and increasing energy. The plan  recognizes the value to the economy’s future and to the development of the country towards a low-carbon economic place and therefore demands a target for carbon intensity of seventeen per cent in addition to a level of energy efficiency at sixteen per cent and many other emissions linked aims.

Aaron is a journalist and financial blogger. He writes about anything to do with economics and personal finance, from interest rates to loans and from mortgages to payday loans.