China’s New Economic Plan Tackles the Rebalancing Puzzle

 

China’s leaders are taking aim on the missing piece of China’s most daunting structural problem – changing the behavioral norms of fearful and uncertain Chinese families. This is a step in the right direction as China comes face to face with the transitional imperatives of an urgent shift from the producer model of the past to the consumer model of the future.

For China, the so-called Fifth Plenum of the Central Committee of the 18th Party Congress, held on October 26-29, came at a critical juncture. Facing serious challenges at home and abroad, the nation’s leadership endorsed a draft of the long-awaited 13th Five-Year Plan – a strategic roadmap that will frame China’s economic and social priorities over the 2016-20 period.

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