(photo credit: Jakob Montrasio)

China’s economy was on fire even as the rest of the world melted down into a financial puddle. But growth like that can’t last forever, and economic officials are starting to hose down the beast before it gets out of hand.

• China’s Premier, Wen Jintao, is about to unveil the nation’s next 5-year economic plan, and it seems like there are some serious changes in store for the people of the People’s Republic.
• Massive growth in the last 30 years brought heavy pollution, widespread corruption, and greater income inequality than ever before. And most of the growth relied on selling goods overseas, which left the local economy underdeveloped.
• Premier Wen says that the government’s new economic goals are to avoid inflation and restructure the economy so that it doesn’t rely so much on exports. Policies will also try to address the inequality that resulted from billion-dollar industries springing up overnight.
• Shifting resources to the local economy may mean slower growth, but it may also result in a lot more jobs, as the new service industry can employ more Chinese than factories can.

Facts & Figures

• China is changing its annual GDP growth target from 7.5% to 7%
• Over the past 30 years, the annual GDP growth rate has been around 9%
• Between 2000 and 2009, employment grew by less than 1%

Best Quote

“We’ll never seek economic growth rate and big size at the price of environment. That would result in unsustainable growth featuring industrial overcapacity and intensive resource consumption.” – Premier Wen

What do you think?

If China devotes less of its economy to manufacturing and exporting cheap goods, do you think prices will rise here in the U.S.?