C OV E R S TO RY
BY KENNETH JARRETT & C A R LY R A M S E Y
China’s
12th Five-Year Plan China’s 12th Five-Year Plan (FYP) is a critically important tool used by the government to achieve its development objectives by mapping China’s future progress via five-year targets for policy makers at all levels of government. The FYP is critical for foreign-invested enterprises because it provides understanding of the government’s overall objectives, specific goals related to economic planning and promotion of key sectors, industries and regions. How does the FYP work, and what is in store for the next five years?
O
n March 14, 2011, nearly 3,000 delegates at the 4th Plenary Session of the 11th National People’s Congress (NPC) approved China’s 12th Five-Year Plan for National Economic and Social Development (FYP) (2011–2015). The 12th FYP is a bold initiative, emphasizing the quality, rather than the measurable quantity, of growth, and strives to ensure that more Chinese citizens benefit from the country’s unprecedented development. At its core, the plan calls for an ambitious, inward-looking restructuring of the Chinese economy away from the last three decades of export-led growth. A more sustainable model for Chinese growth going forward will likely have enormous implications for foreign-invested enterprises (FIE) in China, especially in emerging industries of strategic importance for China. Meanwhile, the 12th FYP comes into force against a backdrop of rising property and food prices and increased risk of social instability. As a blueprint for China’s next five years of social and economic growth and industrial planning, the plan prominently addresses
these and other important issues. The 12th FYP lays out a road map to raise domestic consumption levels with new government healthcare spending, social safety net investments and targeted measures to increase disposable income and address social challenges such as the rising income disparity. The 12th FYP – China’s greenest five-year plan – also includes environmental goals and binding energyefficiency targets to develop a low-carbon economy while improving energy security. Not surprisingly, President Hu Jintao and Premier Wen Jiabao are seeking to use the 12th FYP to bed down their legacy as the first leadership team in the postreform era with a strong focus on equality issues. Under Hu and Wen’s “harmonious society” and “scientific development concept” policy frameworks, the 12th FYP will continue the previous 11th FYP’s focus on moving away from “growth at any cost” and towards a more balanced and sustainable growth pattern. Implementing the initiatives of the 12th FYP will ensure policy continuity during the upcoming leadership transition in 2012/13, when President Hu and Premier
APRIL 2011
INSIGHT
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