Although full details of the document have yet to be published, several of the key objectives and policy proposals have emerged from press release and speeches. Here we excerpt the speech by Ambassador Liu Xiaoming at Chatham House for a quick and relevant review.

As far as I can see, the 12th Five-Year Plan boils down into two key terms – "scientific development" and "peaceful development".

Some people in the West may be curious about the term 'scientific development'. I think it can be explained in four words: "balanced, inclusive, comprehensive and green development".

"Balanced" means China must upgrade its growth model and economic structure. Being the second largest economy, China may lead the world in growth rate and economic size, yet its low-cost industrialisation model is exhausting its potential. So China must go beyond size and speed to achieve strength and quality. This is why the economy is set to grow by 7% annually in the next 5 years, which is a marked slowdown from the double digit growth over the past 3 decades. This slower quantitative growth will make more room for higher qualitative growth and create conditions for 4 major transitions:

• a move from reliance on investment and export to balanced growth driven by consumption, investment and export;
• a shift from low labour cost to home-grown innovation;
• a change from traditional industries to emerging strategic industries and modern services;
• and an evolution from energy and resources consuming development to low-carbon and green growth.

By "green", we are stressing the need to reduce environmental costs of development. The 12th Five-Year Plan calls for building a resource-efficient and environment-friendly society, that is to say, we need to better protect the environment and address the issues around climate change. This has resulted in specific targets, which include:

• Raising the share of non fossil fuels in primary energy consumption to 11.4%;
• Reducing energy and carbon dioxide intensities by 16% and 17% respectively;
• Cutting the discharge of main pollutants by 8-10%;
• Increasing forest stock by 600 million cubic metres and forest coverage to 21%.

I often remind business leaders in this country who are interested in doing business in China that in the past, foreign-invested projects were evaluated on the basis of their economic returns. Now it is environmental impact, as China no longer welcomes polluting, energy-and-resources-consuming businesses. Instead it encourages foreign investors to channel their capital into high-end manufacturing, high-tech industries, modern services, new energy and environment-friendly projects.

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