China's New Focus: Developments from the 10th National People's Congress

Simon Hunt of Simon Hunt Strategic Services has published a long list of observations from a recent trip to China. He also summarizes some of the key points arising from the National People's Congress (link to Premier Wen's address) that concluded earlier today. In sum, "the transition from rapid growth, or growth at all costs, to one that is sustainable and which adds value to the economy and its people is now starting."

According to Hunt the Chinese government is planning on pursuing the following (via John Mauldin):

Growth that adds value to the economy and its people

Narrowing disposable income between rural and urban households

Deploying funding to the rural sector, not just this year, but over the longer term

A focus on the intangibles of growth, such as education, Health care and the creation of a social security network. None of these can be implemented as instant policies but have to be thought through over the next couple of years to produce a coherent set of initiatives.

Industry restructuring

The environment

Husbanding the country's natural resources

Profitability, not the creation of critical mass

Bank lending to be based on proper risk assessments

A balanced economy with greater emphasis on consumption

Increasing focus on technology, in the process moving away from low-technology industries.