China’s Communist leaders are promising to revolutionise the world’s second largest economy and move on from being the world’s workshop, but economists say the monumental task faces major hurdles.
Outgoing President Hu Jintao said GDP would double in a decade and pledged a “transformation of the economic growth model” in his report to the nation at the five-yearly Communist Party congress under way in Beijing.
China’s rulers must maintain growth in the economy to justify their claim to legitimacy – and avoid the spectre of social unrest.
But while selling cheap manufactured goods to the West and spending billions on infrastructure has delivered an economic miracle in recent years, the model is seen as unsustainable in the longer term, and growth is already slowing.
“We should speed up the creation of a new growth model and ensure that development is based on improved quality and performance,” Hu said, adding China would seek to become an innovative technology giant as low-cost manufacturing relocates elsewhere.
The country also needs to make domestic consumption a pillar of the economy, a joint report by the government and the World Bank said in February – endorsed by Xi Jinping, who is expected to take over as party leader from Hu this week.