Ride on China's new 5-year plan

New goals listed in the five-year plan include:

1. Improving the social welfare and livelihood of the people

2. Boosting domestic consumption to accelerate economic restructuring away from its traditional export-oriented focus

3. Narrowing the differences between the western and coastal parts of China.

4. Improving energy efficiency and environmental protection

5. Developing seven strategic key industries, with the aim of increasing their GDP contributions from the 2 per cent of GDP now to 8 per cent by 2015 and 15 per cent by 2020



The focus areas of the 12th five-year plan have presented a wide range of rewarding investment opportunities for investors, who can consider unit trust funds with niche exposures to specific sectors. For example, the household-centric goals mean that funds with exposure to stocks that thrive on consumption spending growth in Asia, such as the United Asia Consumer Fund, will still do well due to supportive government policies, minimum wage increases and improved social welfare. 

Other sectors that could potentially benefit are the material and industrial sectors, thanks to the accelerated roll-out of social housing projects. Low-cost social housing has become a political priority, as it is seen as a key solution to cool off soaring property prices in tier-one cities, a potential economic and social time-bomb.


7 STRATEGIC SECTORS

China is also shifting its focus and resources to seven strategic industries that have been identified to tackle unfavourable demographics, raise productivity, develop home-grown technology and move its industries up the value chain. They are:

1. New energy: Developing clean or alternative energy from nuclear, wind, solar and bio-fuel sources

2. Energy conservation and environmental protection

3. New materials: Rare earth, alloys, membranes, high-end semiconductors

4. Biotechnology: Drug and vaccine development, advanced medical equipment, biomedical research and development

5. New IT generation: Broadband and mobile communication networks, Internet security infrastructure and artificial intelligence

6. High-end equipment manufacturing: Aerospace, telecom and railway equipment and marine equipment

7. New Energy vehicles: Electric cars, plug-in hybrid cars