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The Chinese growth model is delivering diminishing returns. China's cautious leaders face a choice between doubling down on needed reforms or continuing to muddle through on the current path.
Beijing can learn important lessons from the tragedy on the train tracks in Wenzhou about the management of its rail networks and also the more critical issue of its 2020 nuclear energy goals.
An appreciation of the renminbi is not the catch-all solution some claim it to be. If China were to revalue its currency, a widespread appreciation of Asian currencies would not follow, nor would the U.S. current account deficit benefit.
Statistical distortion on the use of coal in China is likely to not only severely undermine Beijing’s energy conservation and carbon abatement policy initiatives, but also make it difficult for the international community to verify achievements claimed by the Chinese government.
Distorted incentive structures in China are encouraging many Chinese corporations to borrow—and increase their unsustainable level of debt—even though investments are not generating sufficient economic value.
As 2012 approaches, both Taiwan and the United States face presidential elections and Chinese President Hu Jintao will step down from his position as general secretary, creating some questions about the future state of U.S.-Taiwan-China relations.
Territorial disputes in the South China Sea threaten regional stability and the U.S.-China bilateral relationship. Yet both the United States and China have an interest in managing tensions and seeking a constructive way forward.
China’s economy can only continue to grow rapidly through ever riskier increases in debt. Eventually, Chinese authorities will either choose to slow growth and curtail investment sharply or they will be forced to do so by their excessive debt.
U.S. interests are best served by maintaining the status quo policy toward Taiwan. Washington cannot accommodate Beijing's demands to stop selling arms to Taipei as long as China continues its military buildup opposite Taiwan's shores.
The Chinese Communist Party's rule is likely to become increasingly unsustainable as economic growth slows and a growing middle class protests against the party's single-minded focus on maintaining power.