政府工作报告PWC解读英文版

10Minutes

Commentary on Premier Wen Jiabao’s 2012 Government Work Report

China is at a turning point. A leadership transition

is imminent against the backdrop of an economic slowdown. The resolve of President Hu Jintao and Premier Wen Jiabao’s successors to continue to drive political, macro-economic and social reforms will be tested.

China’s tremendous economic expansion of the past decade has come at a cost – growing wealth disparities, environmental challenges and social discontent. Can the next generation of leaders realise the potential

of past legacies by delivering the reforms needed to sustain China’s economic ascendancy, prosperity and social harmony?

The recent National People’s Congress sessions

in Beijing comes at a crucial moment in China’s development with an imminent leadership change later this year. Rather than highlighting new reform initiatives, the Congress instead focused on delivering a framework that would ensure a smooth transition from President Hu Jintao to the next generation of leaders.At the Congress, Premier Wen Jiabao outlined a distinctive framework for defining China’s future. His Report to the 3,000 strong NPC delegates, builds upon the significant growth achieved

in the first year of the 12th Five-Year Plan, and sheds new light on the direction of its economic transformation.

Based on Premier Wen’s Report, the following areas will be key issues in coming years:

GDP growth will slow

Three decades of rapid growth has established China as a global economic power and transformed it into the world’s second largest economy. But its growth has come at a significant cost – widening income gaps across regions and social groups, industrial overcapacity, significant environmental challenges, increasing resources constraints, over-reliance on foreign oil imports, a dwindling private sector, real estate bubbles and rising social issues. In Premier Wen’s words, China’s current pattern of economic growth is “imbalanced, uncoordinated and unsustainable.”

From one generation to

the next: China’s roadmap

for growth

Highlights

China’s decision to lower its GDP growth target will provide

its new generation of leaders the flexibility they need to

transition the economy towards a domestic consumption

focus.

With greater clarity on the government’s investment

priorities, foreign investors have more incentive to invest

in key industries such as advanced manufacturing, energy

saving and environmental protection, and modern services.

Companies in China will need to consider ways to deal

with tightened regulation on energy conservation and

environmental protection.

Programmes to encourage migrant workers to relocate to

small and medium sized cities could face challenges from

larger-sized cities, which offer more job opportunities and

career development prospects.

Monopolised sectors, if deregulated, will grant valuable

growth opportunities for small and medium sized

enterprises, boosting services growth and increasing

employment opportunities.

Premier Wen’s new commitment to increase investment

in education will test the government’s effectiveness in

allocating resources to all tiers of education, nationally.

March 2012