NYT: China's new five-year plan

NYT is reporting on China's new five-year plan, which seeks to shift the engine of economic growth from exports to domestic consumption, largely through letting incomes rise:

"The government pledged to keep prices “basically stable” through 2015, limiting inflation to 4 percent this year, and to raise household income by an annual average of 7 percent, roughly in line with economic growth. That would break from the past 20 years, in which the growth of ordinary workers’ income has regularly lagged behind the growth in gross domestic product, and consumer spending as a share of the economy has dropped to a record low. The report called expanding domestic demand “a long-term strategic principle” and pledged to increase subsidies to low-income households, extend broadband Internet to rural areas and smaller cities, and expand retail sectors like chain stores and online commerce."

In economic development terms, this is called "strategy switching," and the move China seems to be making is something commentators including David Kennedy have been talking about for some time. Get ready for one of the largest markets in the world to become even larger.