Economy

China faces four challenges in industrialization

(chinadaily.com.cn)
Updated: 2010-11-06 17:45

The 12th five-year plan (2010-2015) will be a crucial period for China to realize the strategic goal of basic industrialization before 2020, which means changing from a big industrial country into a strong one.

The goal faces four challenges.

First, China’s fast economic growth is restrained by the increasing demand in energy and other resources. For example, China has no choice but to rely heavily on the export of oil and iron ore from other countries.

Second, China needs to adopt an environment-friendly policy, reduce the energy consumption intensity and carbon dioxide emissions.

Third, China’s traditional strengths in labor force and land may lose the competitive edge as the world becomes more globalized, capital market is opening, and the competition tends to lie in knowledge and technology.

Fourth, China’s industrialization is under the administration of both central and local governments, which have created problems such as regional protectionism or overcapacity. Some local governments have manipulated labor or land cost to attract investment and pursue temporary economic growth.