Towards a New Model of Development

China is about to adopt its 11th five-year plan, setting the stage for the continuation of what is probably the most remarkable economic transformation the world has ever seen, improving the well being of almost a quarter of the world’s population. The author argues that part of the key to China’s long run success has been its exceptional combination of pragmatism and vision, constantly adapting to the changing needs and circumstances, but keeping a view of the road ahead. With this plan, even the nature of what is meant by planning is changing. This is not a plan, as this term was understood in the days of Central Planning. It recognizes that, as China moves to a market economy, a plan is not about material balances or directions about how much of each commodity should be produced. Rather, it concerns a vision of the evolving nature of the economy, and of the role of government; it indicates the priorities both for expenditures, and institutional and policy development; and provides a framework for coordinating economic activities.