China aims to join 'high-income club'

"Without innovation and the makeover of the economic structure, it would be impossible to realize that," Xu said. "The country could linger in the 'middle-income trap' indefinitely."

This is why the government will put new emphasis on innovation and structural upgrading in the coming Five-year Plan, he said.

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This is evident in the 25 subjects on which the NDRC has solicited opinions in preparation for the making of the plan.

Many of the subjects are related to the effort, such as the forces of economic transformation and upgrading, information technology and education modernization.

The government also elevated the role of the market. Xu Shaoshi, chairman of the NDRC, said earlier that the plan will avoid touching on competitive sectors.

"In those competitive sectors, it is the market players that are having their impact. The government could not make a difference even if it made a plan," Xu Lin said.

Wang Ge, a researcher with the Academy at the China Development Bank, said China has almost used up its dividends from previous reforms and cheap factors (labor, land and capital). To achieve a high-income status, China must overcome five "traps" - those of backward institutions, social inequality, delayed technological innovation, overreliance on overseas capital, and market and ecological meltdown.

FACT BOX

·While leaving many sectors to market forces, the new plan will add more binding indicators to be managed by the government. For example, the 12th Five-year Plan has 14 binding indicators, such as energy consumption per GDP unit and share of alternative energy in the energy consumption mix.

·The current "strategic emerging industries" will not be changed in the next plan, and more will possibly be added. There are seven such industries now, including high-end equipment manufacturing, new energy and new materials.

·The 13th Five-Year Plan will put more emphasis on how the coastal regions can transform and upgrade their economies. Without such transformation, there will not be a transformation in the national economy.