chinas five year plan presentation v6

8/2/2019 Chinas Five Year Plan Presentation v6

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Chinas Five Year Plan


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Agenda

What is the Chinese Five Year Plan

How it is formulated

Strategic shift of the 12th Five Year Plan

The 12th Five Year Plan

What have we heard

Lessons to Brazil and other countries


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What is the Chinese Five Year Plan?

Strategic plan of national economy and socialdevelopment.

Clear statement of their domestic and internationalstrategic positioning, action plan and key indicatorsdefinition. (Balanced Scorecard)

Roadmap for investors (rules of the game)


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What is the Chinese Five Year Plan?

Plan Dates Key Features

First 1953-57 Stalinist Central Plan

Second 1958-62 Great Leap Forward

Third 1966-70 Agricultural Push

Fourth 1971-75 Cultural Revolution

Fifth 1976-80 Post-Mao (Reforms and Opening Up)

Sixth 1981-85 Readjustment and Recovery

Seventh 1986-90 Socialism with Chinese Characteristics

Eighth 1991-95 Technical development

Ninth 1996-00 SOE (State Owned Enterprise) Reforms

Tenth 2001-05 Strategic Restructuring

Eleventh 2006-10 Rebalancing Alert

Twelfth 2011-15 Pro-Consumption


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Pre-analysis (2 years ahead of the plan period)

Basis principles (year ahead of the plan period)

Plan draft starts (1 year ahead of the plan period)

Content details Target setting Draft framework

Plan draft completed (prior to the plan period)

Revision Approval Review

Publication (approved by local congresses in the first year of the plan period)

Evaluation (during the plan period)


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Regional, corporate and special plans

Example: Suzhou Industrial Park
http://www.sipac.gov.cn/english/zhuanti/2011yqsew/index.htmhttp://www.sipac.gov.cn/english/categoryreport/AuthoritiesAndPolicies/201101/t20110110_81500.htm


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Strategic Shift

http://www.economist.com/economics/by-invitation/guest-

contributions/chinas_growth_model_faces_radical_change

Previous FYP 12th

FYP

Growth at all costs Sustainable growth (economic, social

and ecological sustainability of

economic activity at the forefront)

Double digit growth (higher thanstated)

7,5 => 7,0

Export based Domestic consumption

Inefficient energy matrix Go green goals and incentive$

Unbalanced income distribution Lift the incomes of its low-earners

Coastline development Go west

Mass production Innovation / Value added


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Expanded

domestic

demand

Improvedindustrial

structure

To solve

Double incomeMassive development of

western regions

Regional economy

Guaranteed housing

Development of strategic

emerging industries

Upgrade traditional industries

Core issues (Uns):

-Unbalanced

regional

development

-Unbalanced

industrial structure

-Unbalanceddemand strucure



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Restructurers

Domestic

consumption

Social

utilities

Reinventors

New StrategicIndustries



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Restructures

36 million affordable living

units construction

Strict oversight of housing

loans


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The 12th Five Year Plan Reinventors

Transform low efficiency andhigh pollution manufacture

through innovation and

upgrades.

Fiscal and tax policies toencourage to higher energy

efficiency (go green), use of

technology and business

development and industry

consolidation (create national

champions).

Automative, Industrial

machinery


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Social Utilities

Improved infrastructure to

the urban-development

program

Investments on power grid,

railways andtelecommunications

Secure revenue streams for

suppliers


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New Strategic Industries:

New Energy sources and

biotech (government as an

incubator)

GDP increase from 1% today

to 8% in 2015

Competitive landscape

shaped by the government/

regulatory decisions

(technology paths, industrystandards, partnership

models)



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Domestic consumption

13% increase in minimumwage per year to spur private

spending (increasing labor

costs)

Deregulation of health care,logistics, financial services

Opening markets to foreign

companies

Attention to food and drugsafety and quality standards



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The 12th Five Year Plan City

Chengdu Case Video
http://www.youtube.com/user/chengduhitech?blend=22&ob=5


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Labor cost are increasing => With a better welfcare, chinese will buy more

with the money they used to save for their senior age.

The appreciation of the RMD is making the industry more competitive =>Many industries have 200 300 players. Industry consolidation to obtainscale and efficiency (national and international players/ brands)

Added value & Innovation

If you had US$ 1 million for a cement plant in beijing 20 years ago, we woulddo business. Nowadays, we wouldnt, even for US$ 1 billion (for a non addedvalue business in beijing) - World bank chinese consultant

they have all the means to execute their plans - Tatiana Rosito (Director forEconomic and Trade Affairs Brazilian embassy in China):

What have we heard


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Welcome long term direct investors by having a clear set of business

rules, valuation metrics, action plan for social, domestic investmentsand international partnerships.

Choose a role model and be better. Lets face it: thinking that we arebetter than Argentina is not good enough. Why not take as our

model: South Korea for education, Singapore for business andNorway for quality of life? And be better!

Invest on education to attract high tech companies (the R&D area notjust the commercial).

The only example of value added company that has a competitiveedge globally is EMBRAER. What is our plan to ADD VALUE to otherproducts and COMPETE internationally?

Lessons to Brazil and Other Countries


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Social order in Singapore can be reckoned good because they enforce very strict

management. We should draw upon their experience and run our country even better

Deng Xiaoping


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Thank you

George Holland

chinas five year plan presentation v6

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