China was considered as factory floor of the world until few years go. But that has started to change as wages rise and most parts of the world experience economic recession. Just concluded Chinese communist party congress considered various economic models. It was decided that a growth rate of 6.55 per annum should be targeted until 2020. It was also decided that focus will shift from export oriented economy to move it more towards domestic consumer demand and development of services sector.
Economists around the world has cast doubts about the success of changing orientation of Chinese economy. In their view there are many hurdles China has to overcome to be able to succeed with this. First hurdle is retraining of the work force to become knowledge workers. Second is the development of soft infrastructure that is important for services sector development. These are affordable high speed internet; international banking; mobility of work force; and logistics of moving goods.
China is confident it will be able to overcome the hurdles. They are now focusing rise of income and spending levels of consumers as engine of growth. Economists suggest that authenticity and credibility of economic date is a concern because Chinese Communist party is concerned about spread of panic that real data might unleash. They have not forgotten the collapse of stock market last year. Chinese President and cabinet members have indicated that they want to control flow of information and censor any news that might be considered damaging for the economy.