China is poised to begin its transition from middle-income to developed-country status. Relatively few economies (five to be precise, all in Asia: Japan, South Korea, Taiwan, Hong Kong, and Singapore) successfully managed this transition while sustaining high growth rates. No country of China's size and diversity has ever done so.
China's 12th Five-Year Plan, adopted last month, provides the road map it will follow. Yet it is not really a plan; rather, it is a coherent interconnected set of policy priorities to support the economy's structural evolution – and thus to maintain rapid growth – over the period of the plan and beyond.
So a great deal is at stake, both internally and externally. Growth in the world's emerging economies now depends on China, the main export partner for a growing list of major economies including Japan, South Korea, India, and Brazil.
There are at least five important interconnected transitions embedded in China's new Five-Year Plan: