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Chinas Five Year Plan
8/2/2019 Chinas Five Year Plan Presentation v6
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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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How it is formulated
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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How it is formulated
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.htm8/2/2019 Chinas Five Year Plan Presentation v6
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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
The 12th Five Year Plan
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Restructurers
Domestic
consumption
Social
utilities
Reinventors
New StrategicIndustries
The 12th Five Year Plan
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The 12th Five Year Plan
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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The 12th Five Year Plan
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)
The 12th Five Year Plan
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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
The 12th Five Year Plan
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The 12th Five Year Plan City
Chengdu Case Video
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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
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