The Chinese government’s latest policy outline should lead to a much larger consumer economy and more manageable—but still ambitious—growth over the next five years. However, a new China brings plenty of changes to the country’s investing dynamic. Here, I give you ten stocks to consider.

Meet the new and improved China.

The government released the draft of its next five-year plan—its 12th—on March 5. The plan includes soaring goals written by numbers-obsessed bureaucrats (3.3 patents for every 10,000 people, for example). It also commands the uncommandable, such as improved democracy.

This latest plan lays out a major shift in the Chinese economy. It calls for slower growth, increased domestic consumption, cuts in water and energy consumption per unit of GDP, a shift toward a service economy, an increase in urbanization and a 13% annual increase in the minimum wage.

Here are some of its major themes:

  • Slower economic growth. The plan calls for reducing annual GDP growth to 8% this year, and to an average of 7% a year over the five-year period. That's a big change from the 10.3% growth in 2010.
  • Faster income growth. The goal is to increase household incomes by 7% a year, on average, over the period of the plan. One way to do that is through a 13% average annual increase in the minimum wage. Another way is to create millions more jobs in cities. China has set a goal of increasing its urbanization rate 4 percentage points, to 51.5%, over the five years.
  • More housing. The plan calls for the construction or renovation of 36 million apartments for low-income families.
  • Larger service sector. It also seeks a shift in the economy, from exports and manufacturing toward domestic consumption and the service sector. Under the plan, the service sector is to grow to 47% of GDP, an increase of four percentage points.
  • Better retirement benefits. Under the plan, pensions would be created to cover all rural residents and 357 million urban residents.
  • More efficient use of energy and water. Energy consumption per unit of GDP would be cut by 16% and water consumption per unit of industrial output would be cut by 30%. In addition, nonfossil fuels are to account for 11.4% of primary energy consumption.
  • General price stability. Inflation is now running at about a 5% annual rate.

Clearly, if you're invested in China or interested in investing in China, you should tweak your investment strategy. But how, exactly?

The final versions of previous five-year plans haven't deviated much from the draft released at the start of the meeting of the National People's Congress. So the outlines of this draft plan are likely to be very close to the final plan itself.

As I wrote in a March 7 post on my site, I don't think there's any reason to doubt that China's leaders take these goals seriously and intend to reach them. But I do doubt that they can actually deliver on all of them.

This isn't Chairman Mao's command economy anymore. It's important that investors incorporate some assessment of "commandability" in their investment strategy, to take account of what will actually get accomplished and what are just words on paper.

Next: Where to Invest

Tickers Mentioned: Tickers: PKSGY, LVMUY, HMIN, BIDU, MAT