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10 FOCUS PSI Journal 5/2016 www.psi-network.de and Management and a visiting professor at the China European Business School in Shanghai, puts the situation in a nutshell by saying „The success story of the Chinese economy is not over yet, but it will be a different one“. China is currently experiencing desired and necessary structural changes – slower growth and declining exports are normal reactions. Therefore, an even lower growth rate of 6.5 per cent per year was defined as the target value under the new five-year programme. The aim to ensure that growth is more sustainable, stable and coordinated in future has been on the agenda since 2008. The declared objective is to restructure the exporting nation („workbench of the world“) into an economy geared to services, innovation and technology as well as domestic consumption. ENORMOUS CHALLENGES The current economic model has spawned an investment-driven economy in which mass-production factories manufacture cheap products for the global market thanks to a huge army of cheap workers. This benefits many industries, not least the promotional products industry. The industrial revolution is based on an investment rate of 50 per cent which is still very high, whereby public investment, for example in the housing sector, continues to be a key growth engine. The problems produced by this economy make the need for reform obvious: Industrial overcapacity, declining productivity and profitability, unprofitable investments, growing indebtedness of the companies, pollution, an intensifying inequality of income distribution, an ageing population as well as fewer and insufficiently qualified workers necessitate urgent action. In the short term, i.e. until around 2020, growth rates of over five per cent will still be possible, but what comes afterwards will depend on whether the targeted development of a modern economy with a high per capita income and a high quality of life is achieved. China is thus facing enormous tasks: In order to remain competitive, the economy must continue to modernise. Quality rather than quantity, innovation rather than cheap products, services instead of industry, a high-tech industry instead of standard products, consumption instead of investment and quality of life instead of environmental degradation – this is how the new China should look. These goals are laid down in the „Made in China 2025“ plan. (See Horst Löchel in ChinaContact, January 2016). CONTRADICTORY POLICY Many economists are calling for faster and more effective reforms, complaining that restructuring is progressing too slowly. A stronger market orientation which allows more entrepreneurial and (international) competition was explicitly identified as an objective. For this purpose, however, the economy would have to be far more open than in the past, notes the European Chamber of Commerce. The Chamber sees great contradictions between reform and market closure in the governmental agenda and is concerned that the reform momen-

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