As the blue social model collapses across Europe and the United States and Britain grope to replace it, China is trying to build a blue social model of its own.That at least is the message of outgoing premier Wen Jiabao in the speech China-watchers compare to the US State of the Nation. As the Washington Post reports, Wen calls for massive increases in China’s social spending, more paid vacation, and higher agricultural subsidies.The goal is the same goal that shaped US and European social policy after World War Two: to establish a mass consumer society. China’s leaders believe that their economy can no longer grow at ten percent or more per year based on exports, and they fear for the country’s future as public discontent rises. The solution: to promote higher living standards for Chinese consumers as a way of stimulating domestic demand for Chinese goods and to quiet social unrest.The shift towards a Chinese consumer society and welfare state has been building for some time. The US in particular has been urging China to move toward a consumption based economy at least since the Clinton administration. Americans and others around the world hope that a shift toward internal demand will shrink China’s trade surplus and even increase China’s demands for foreign goods.Nobody knows if China can execute this shift smoothly and sustainably. There is certainly a massive spending gap: China’s push for export oriented manufacturing growth has ravaged the country’s fragile environment and created huge inequalities. The social safety net is threadbare and services like health care are rudimentary in much of the country.China will face problems as it tries to make this shift. One is that many factories will be moving to cheaper destinations as China tries to raise wages and working conditions. Countries like Vietnam and Bangladesh are already picking up industries that are being priced out of China. India and Pakistan would both like to horn in on this business as well, and there are signs that countries like Japan are actively seeking alternatives to China for new manufacturing investment.If rich countries like the US, the UK, France and Italy are cutting back on their welfare states, it will be interesting to see whether China (which, thanks in part to the one child policy faces a demographic transition of unprecedented speed) can move in the other direction.From a US point of view, we should wish China well with a transition that if nothing else may help ease US-China trade tensions — and step up our search for the next and higher level of social organization.