China’s falling growth rate is set to figure prominently in this year’s U.S.-China Strategic and Economic Dialogue. This trend has reinforced the prevailing view that China must employ a more balanced growth process and increase consumption to escape the middle income trap. However, lessons from other successful developing countries suggest that the path to growth may involve continued imbalances and require policy reforms that are often misunderstood.

Drawing on the results of an ongoing study, Yukon Huang and Clare Lynch discussed the myths and realities of China’s new growth model.