Economics
China's Leaders Shift From Short-Term Stimulus to Five-Year Plan
- Defensive stimulus needed to ensure structural reforms
- Excess capacity may undercut measures to prop up growth
Will China’s Five-Year Blueprint Stimulate Growth?
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China’s leaders gathering in Beijing this week to formulate the 13th five-year plan confront an era of sub-7 percent economic growth for the first time since Deng Xiaoping opened the nation to the outside world in the late 1970s.
Old drivers such as manufacturing and residential construction are sputtering, and new areas like consumption, services and innovation aren’t picking up the slack quickly enough. While President Xi Jinping’s for 2016-2020 will seek to map out the structural change needed to propel the next leg in China’s march toward high-income status, a more immediate fix has been delivered with the sixth interest-rate cut in a year.