What is in this article?:
- 'World's Workshop' China Aims to Reinvent Itself
- Expect Slowdown in GDP Growth
China's Communist leaders are promising to revolutionize the world's second largest economy and move on from being the world's workshop, but economists say the monumental task faces major hurdles.
Outgoing President Hu Jintao said GDP would double in a decade and pledged a "transformation of the economic growth model" in his report to the nation at the five-yearly Communist Party congress under way in Beijing.
China's rulers must maintain growth in the economy to justify their claim to legitimacy -- and avoid the spectre of social unrest.
But while selling cheap manufactured goods to the West and spending billions on infrastructure has delivered an economic miracle in recent years, the model is seen as unsustainable in the longer term, and growth is already slowing.
"We should speed up the creation of a new growth model and ensure that development is based on improved quality and performance," Hu said, adding China would seek to become an innovative technology giant as low-cost manufacturing relocates elsewhere.
The country also needs to make domestic consumption a pillar of the economy, a joint report by the government and the World Bank said in February -- endorsed by Xi Jinping, who is expected to take over as party leader from Hu this week.
But the changes could have enormous human costs in terms of job losses, which in turn could fuel unrest -- anathema to the ruling party. And training unqualified workers to compete with Western economies is a gigantic task.
A few Chinese manufacturing sectors have been able to compete directly with Western firms, including those in communications and high-speed trains.
China is also said to be developing a domestic airliner that could challenge Boeing and Airbus for sales.
But for now the economic boom remains firmly dependent on a cheap workforce, an undervalued currency and artificially low interest rates, Michael Pettis, finance professor at Peking University, told AFP.
"To be profitable in China does not require technological innovation. What matters is access to cheap credit and government connections," Pettis said.
Labor-intensive industries, such as textiles and shoes, have already begun to leave for less-developed cheaper nations including Indonesia and Vietnam.
"China will remain a manufacturing powerhouse but much of the lower end will be transferred to lower-wage countries in Asia, but also possibly to Latin America and Africa," said Jean-Pierre Lehmann, director of the Evian Group, a think tank.