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China’s radical economic reforms could bring new prosperity to hundreds of millions—if Xi Jinping can successfully navigate the bumps ahead.
The year ahead will be volatile for Asia. Can countries in the region continue to prosper and keep disputes in check while China vigorously reforms and North Korea provokes its neighbors?
A steep but orderly reduction in GDP growth is likely to be the best evidence that Beijing is forcefully implementing reforms, and that China is preparing itself over the decade to regain growth on a healthier long-term basis.
In countries with financial repression, like China, monetary policy has a muted impact on consumers and a dramatic impact on producers, leading to unsustainable patterns of investment and consumption.
To make the market “decisive,” the state must retreat. China’s leaders have declared war on powerful “vested interests” that oppose reforms, but the biggest vested interest in the Chinese economy is, in fact, the state itself
China wants the benefits of a charm offensive with its neighbors, but it also wants to guard its far-flung territorial claims. It cannot do both.
The third plenum reform proposals will take time to enact but, if rigorously implemented, they will enable China to continue growing at 8 or more percent while also improving the quality of growth.
Public and elite attitudes in the United States and especially China are exerting a growing influence on the bilateral security relationship.
Both China and its neighbors need to proceed with restraint by focusing on solving pragmatic problems rather than diverting attention to intense territorial disputes
As China shifts away from its traditional debt-fueled growth strategy, resources will have to be reallocated from the state to households. The resulting political tensions will be difficult to manage.