China to revamp growth model in next five years

BEIJING - CHINA, long the bargain workshop to the world, plans in the next five years to boost wages and narrow a worrying wealth gap as it vies to head off social unrest in a new and improved economic model.

After decades of blistering growth that elevated its economy to number two in the world, Beijing wants a more sustainable path via higher domestic consumption and less reliance on exports and investment.

The 2011-2015 blueprint, to be unveiled when parliament convenes for its annual session from Saturday, will focus on ameliorating social welfare, championing innovation and reducing China's world-beating carbon emissions.

'China's 12th Five-Year Plan could represent a watershed in the country's pattern of economic development,' Eswar Prasad, the former head of the International Monetary Fund's China division, told AFP.

'The main objective of the plan is to reorient growth to make it more balanced and sustainable ... this is necessary to ensure greater social stability,' said Mr Prasad, a professor of trade policy at Cornell University. The overhaul - if successful - could see a slowdown in China's economy, which grew 10.3 per cent in 2010, and help ease tensions with its key trade partners, analysts say.

While top leaders have long stated the need for retooling the growth model, experts said the global financial crisis had given them a sense of urgency after millions of factory workers lost their jobs and growth slowed sharply. -- AFP