China's 12th Five-Year Plan and global economic rebalancing

Abstract

This article examines the likelihood of China's 12th Five-Year Plan, making a significant change in the economic balance between global savings and consumption in the aftermath of the recent financial crisis. It illustrates this by pointing to the high savings and investment rates, and low-consumption rates in Pacific Asia, especially in China. It goes on to consider whether the 12th Five-Year Plan is likely to change those tendencies significantly and move China towards greater domestic consumption as the main driver of domestic growth. The article concludes by considering the likely impact upon China's foreign trade balance, especially with the United States.

Keywords:

• China
• Five-Year Plan
• global economic balance
• trade balance
• Asian savings
• Asian consumption