China’s twelfth 5 year plan, forecasts 2015 as the year China will have the world’s largest population, largest greenhouse emissions, largest army and potentially the world’s largest economy. For three decades China’s economic formula has been – produce ultra cheap manufactured goods, export them globally and reinvest the proceeds back into the industrial sector to build more rail, ports, factories and skyscrapers. China has recently lent enormous sums to the west including $1.1 trillion to the American government.
Disaffected Chinese workers launched a wave of industrial action last year forcing large employers like Honda to grant pay rises of around 25%. In March 2011 China’s environment minister Zhou Shengxian, said “the exhaustion of resources and the deterioration of the environment have become serious bottlenecks constraining economic and social development.”
By turning the current economic model on its head (Charlton A., The Monthly June 2011) China’s new plan seeks to dramatically lift wages in the manufacturing sector, shift ten of millions of workers to higher paid service industries and refocus the economy on supplying the domestic market. Continue reading