As consumption is a key element in China's economic rebalancing, this area will clearly be a priority in the 13FYP. This view is supported by President Xi's remarks in May 2015, 5 when he said that China should move from the investment- and export-led growth model and make consumption, investment and exports work in a more coordinated manner. Therefore, the government's strategy will be to boost consumption while ensuring reasonable investment growth during the 13FYP to achieve its growth target, said Barclays in a research note.
Domestically, in addition to further progress in financial, fiscal and SOE reforms, the government is expected to follow through on the 'human-centred' urbanisation plan announced in 2014 to boost both consumption and investment.
"The 13FYP of the country is expected to emphasise further strengthening of the social safety net, further liberalisation of the household registration system (Hukou), as well as land reforms. Further adjustment in the population policy with the two-child policy being applied universally", argues Barclays.
The 13FYP will also be a critical period for China to carry out a series of new and global initiatives, such as 'Made in China 2025', 'One Belt, One Road', and a further round of reforms to deepen the opening up of the economy. With the aim of making China a world class manufacturing power house, analysts believe these plans should upgrade China's industries and improve its international competitiveness, facilitating the country's transition from an exporter of manufactured goods to an exporter of capital and technology.
