MILAN – Despite China’s widely discussed economic slowdown, annual GDP growth remains above 7%, implying little cause for alarm – at least for now. The question is whether the government’s efforts to implement structural reforms and transform the economy’s growth model are working – that is, whether internal imbalances continue to threaten long-term economic performance. Given that China remains the global economy’s most important growth engine, the answer matters to everyone.
Assessing China’s economic stability requires considering the conflicts and tensions affecting the country – none of which advances the cause of growth. For starters, China’s territorial disputes with many of its neighbors, including Japan, Vietnam, and the Philippines, are undermining regional peace, not to mention economic integration.