China’seconomic performance over the past 30 years has been remarkable. It is a uniquedevelopment success story, providing valuable lessons for other countriesseeking to emulate this success—lessons about the importance of adapting tolocal initiative and interregional competition; integrating with the world;adjusting to new technologies; building world-class infrastructure; andinvesting heavily in its people.
In the next 15 to 20 years, Chinais well-positioned to join the ranks of the world’s high-income countries. China’s policymakers are already focused on how to change the country’s growth strategy torespond to the new challenges that will come, and avoid the “middle incometrap.” That is clearly refected in both the 11th and 12th Five Year Plans, withtheir focus on quality of growth, structural reforms to harness innovation and
economic effciency, and social inclusion to overcome the rural-urban divide andthe income equality gap.
The idea behind this study was developed in 2010, at the celebrations for the30th anniversary of the China–World Bank partnership. To commemorate thatmilestone, President Zoellick proposed to Chinese leaders to work jointly onidentifying and analyzing China’smedium-term development challenges looking forward to 2030. Together, China and the World Bank would conduct researchdrawing on lessons from international experience as well as China’s own successful development record, and preparea strategic framework for reforms that could assist China’s policy making as well asguide future China–World Bank relations. China’s state leaders welcomed andsupported the proposal.

This report, China 2030: Building a Modern,Harmonious, and Creative High-Income Society, represents the results of thatwork. The research was organized jointly by China’sMinistry of Finance (MOF), the Development Research Centerof the State Council (DRC), and the WorldBank. The report was written and produced bya joint team from DRC and the World Bank who worked together as equal partners.The team held numerous workshops, prepared several studies and background papers,and forged common ideas as well as bonds of friendship and mutual respect. A preliminaryreport was discussed at a high-level international conference held on September3, 2011, at which many Chinese and international experts provided helpful commentsand guidance. This volume builds on these comments and further work commissionedby the team.The report is based on the strong convictionthat Chinahas the potential to become a modern, harmonious, and creative highincomesociety by 2030.

In order to reach that objective, however, China mustchange its policy and institutional framework. China’s next phase of developmentwill need to build on its considerable strengths—high savings, plentiful andincreasingly skilled labor, and the potential for further urbanization—andcapitalize on external opportunities that include continued globalization, therapid growth of other emerging economies, and promising new technologies. Atthe same time, Chinawill need to address a number of signifcant challenges and risks, such as anaging society, rising inequality, a large and growingenvironmental defcit, and stubborn external imbalances.

The report proposes six strategic directionsfor China’snew development strategy. First, rethinking the role of the state and the privatesector to encourage increased competition in the economy. Second, encouraginginnovation and adopting an open innovationsystem with links to global research and development networks. Third, looking togreen development as a significant new growth opportunity. Fourth, promoting equalityof opportunity and social protection for all. Fifth, strengthening the fiscal systemand improving fscal sustainability. Sixth, ensuring that China, as aninternational stakeholder, continues its integration with global markets.

Using the 12th Five Year Plan as a startingpoint, and the six strategic directions as a policy framework, this report laysout a time frame for and sequencing of reforms that can take China toward itsvision for 2030. We hope that it can provide a practical guide to help China’s policy makers successfully navigate thisnext phase of China’sdevelopment journey. We also hope that it will mark the beginning of anotherperiod

of fruitful partnership between China and theWorld Bank.