Shift to hi-end mfg (bec of demographics which will lead to a dramatic fall-off in the number of workers) The lack of workers will result in higher wages. Last year, minimum wage already increased 23% last year.
Shift from mfg to svcs
Will achieve BASIC convertibilty of RMB within 5 years. Huge oppty for HK to be an offshore RMB center in the interim.
Big changes will take place bec of mkt and technological forces.
Because of inevitable increase in wages, economy will naturally become more consumption-driven. Moreover, the govt will achieve full social services coverage in the countryside within 5 years.
Prevalence of internet and its shaming capacity will exert an enormous force on politicians' behavior.
Latest 5 year plans acknowledges lots of social problems. A surprise! But no proposals in the plan to address these social grievances through institutionalized mechanisms.
Plan placed a huge emphasis on development of human capital, i.e., education.
Plan also emphasized the environment.
Hu Jintao will try to keep himself in a dominant position for at least 3-4 years.
Jiang era: (unchecked) economic growth. Hu-Wen: introduction of more socialism (safeguards)
Huge boom in number of universities not matched by increase in jobs. Move to a more technologically-intensive economy will exacerbate this problem.
China could permit the creation of more NGOs to absorb new graduates.
Two major objectives --
Stability - need education (development of human capital) and rising incomes
Sustainable growth - greater energy efficiency needed in mfg. Need to also move up value chain by creating brands and offer more services.
Raising wages so aggressively in the PRD might be too fast of a change because the labor force dislocation is so hard to manage. "The HK post-industrial economy has not adjusted well over the last 20 years." [Personally, I think you have to be smoking crack to say such a thing.]
Plan is "Mission Impossible". "Nothing new" in this plan. "Scientific approach" propounded by Hu Jintao is a paradigm shift, which emphasizes comprehensive management of quality of life, rather than just economic growth.
Party excels at continuity -- with adjustments.
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