China has recently announced new details of it’s 13th five year plan.

The five year plan system is a Soviet-style planning technique  from China’s Communist past, but it remains a pivotal feature of the Chinese government. We are currently just concluding the twelfth version of the plan. The full details of the thirteenth version will only be revealed in March 2016, when the 13th Fifth Year Plan is unveiled in full.

Focus: Balancing the economy

Attempts to steer the economy into a new direction formed a large part of the last five year plan.

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Graphic from the Telegraph.

China’s leaders have stated repeatedly they want to move away from a dependence on low-cost exports towards more sustainable growth that relies on the service sector, high-end manufacturing and domestic consumption. Analysts widely expect the party to ditch its 7% target growth rate over the course of 2016-2020.

Instead, party officials seem more likely to concentrate on metrics such as job creation and wage growth as a better gauge of sustainable economic growth and, perhaps more critically, social cohesion.

However, growth targets are still likely to remain ambitious, hovering somewhere around 6.5-6.9% over the next five years. This is still on the optimistic side of most independent estimates, which forecast growth averaging just under 6%.

Other headline topics:

The abolition of the one child policy- This is one of many social welfare changes. The goal is to alleviate the social strains caused by an ageing population and an escalating dependency ratio and is meant to be seen as a “gift” to Chinese society from the government. Other changes include extending elderly insurance to the full population through state funds, overhauling the healthcare system and promoting education specifically for 16-18 year olds.

Real objectives towards environmental policy- This reflects the popular social movement which has built over the past year as well as the impending Paris summit on climate change taking place in December.

An anti-corruption campaign- The campaign is the most extensive and brutal we have seen in recent years. Xi commented back in September that the fight against corruption “never ends”. In keeping with this message, the Fifth Plenum endorsed the removal of 10 former Central committee members on charges of corruption.

As more details emerge about the plan, China’s area of focus will become more clear.