China Drafts Next Five-Year Plan with Suggestion from ADB

Senior officials from the Chinese government and Asian Development Bank have met to analyze the draft of the country's 12th Five-Year Plan.

The further expansion of domestic consumption and improving the quality of economic growth remain the top priorities of the plan, which will set the blueprint for China's general social and economic development from 2011 to 2015.

Chen Xi has more.

The fundamental basis of China's economic recovery is still not stable, although the world economy appears to be getting back on the right track following the global financial downturn.

Xu Xianping, Deputy Director of China's National Development and Reform Commission, made the remark while drafting the 12th Five-year Plan with officials from the Asian Development Bank.

He says some notable issues are still blocking China's economic recovery as the world economy faces a number of uncertain elements.

"Against the background of deep restructuring and the recession of international demands of the world economy, China faces huge pressure as its growth model and industrial structure heavily depend on foreign trade. In addition, its social development still lags behind economic advancement, particularly with respect to the aspects that concern the basic interests of the public such as education, medical care, housing, income distribution and social security."

Commenting upon the draft of China's next five-year plan that will cover the years 2011 to 2015, Xu says the Chinese government will continue some existing favorable policies. He also says the expansion of domestic consumption is high on the agenda.

"During the next five-year period, we will make the expansion of consumption within China a strategic principle for long-term and stable economic progress. The internal power for structural optimization and upgrading mainly relies on self-innovation."

Xu says the new plan highlights some other issues, including the coordinated development of rural and urban areas, social improvements and the strengthening of resource conservation and environmental protection.

Lawrence Greenwood, Jr., Vice-President of the Asian Development Bank, firmly echoes the Chinese officials' policies in drafting the new plan.

He says he expects great changes in China's economic model in the next five-year plan, saying polices promoting the quality of growth are essential.

"The 12th Five-Year Plan presents a unique opportunity to address lingering structural economic strength and to allocate resources, ultimately ensuring that rich and poor people across the regions of China will achieve balanced economic development in the next 10 to 15 years. China will be ranked as an upper-middle-income country if its economy continues to grow at the current pace."

Statistics indicate that fixed-asset investment in China increased by more than 30 percent in 2009 compared with the same period the year before. The volume of consumer retailing also grew dramatically.

The two elements substantially offset the negative impact of declining exports on China's economy and pushed the country's GDP to 8.5 percent last year.

Chen Xi, CRI News.