Redwood: Carry on China

In March China published its 12th five-year plan. The word ‘plan' has been adjusted to take into account the growing role of the private sector in economic growth.

We should take this plan seriously, just as China took previous plans seriously. This plan wishes to keep the resident population below 1.4 billion. That is still a huge number of people, almost twice as many as the US and the EU combined. It states a clear intention to divert more of China’s rising output into individual consumption. The aim is to raise living standards and wages rapidly. The aim is 7% per annum growth, a very rapid rate by Western standards but considerably slower than China achieved over the last plan period. As living standards are still low compared to the US, thi...