Benefiting from China's five-year plan

think: act CONTENT

2006

"...an unbalanced economic structure..."

While most political leaders are well-known for making vague statements in public, Chinese Premier Wen Jiabao recently showed that he is not one to mince words. In his speech presenting China's next five-year plan to the National People's Congress, Wen sounded like a CEO preparing his top management for tough restructuring.

Wen addressed the pressing need to attack the complex problems that China's rapid development entails. And he made it clear that the government plans to work hard to deal with “...an unbalanced economic structure, weak capacity for independent innovation, slow change in the pattern of economic growth, excessive consumption of energy and resources, worsening environmental pollution, serious unemployment, imbalance between investment and consumption, widening gaps in development between urban and rural regions, growing disparities between certain income groups, and inadequate development of social programs.”

The Premier's words should not be taken lightly: In the past, the Chinese government's fiveyear targets have always been surpassed. But despite Wen's harsh words, his speech was not meant to put a damper on China's further development plans. On the road to becoming one of the world's greatest economic powers, China intends to keep to its development policies and pursue major infrastructure projects. However, Wen made it clear that economic growth can no longer be pursued without social and environmental considerations. Sustainability and what the premier referred to as a "harmonious society" have made it onto the Chinese government's agenda.

The new five-year plan's economic and social objectives are of particular interest to European corporations doing business in China. For this reason, we have highlighted the objectives and their likely impact on European companies.