The focus on exports has undoubtedly served China well over the last four decades. But the key to achieving President Xi Jinping's goal of creating a “great modern socialist country” by 2049 will be unleashing the potential of China’s domestic market, especially by eliminating institutional barriers to the growth of private enterprises.
SHANGHAI – Two years ago, Chinese President Xi Jinping declared that by the time the People’s Republic celebrates its centenary in 2049, it should be a “great modern socialist country” with an advanced economy. To achieve this ambitious goal, China will need to secure another three decades of strong economic performance and inclusive development. The question is how.
The first step toward answering this question is to understand what has driven China’s past successes. The list is impressive: three decades of double-digit GDP growth; a sharp increase in the urbanization rate, from 18% in 1978 to 57% in 2016; and plummeting poverty, according to China’s own standard, from 250 million people in 1978 to 50 million in 2016. At this rate, China will have completely eliminated poverty sometime next year.
But the People’s Republic did not thrive from the very start. On the contrary, Mao’s highly dogmatic and centralized approach, embodied in the disastrous Great Leap Forward and fanatical Cultural Revolution, not only prevented the country from advancing technologically; it pushed the economy to the brink of collapse.
SHANGHAI – Two years ago, Chinese President Xi Jinping declared that by the time the People’s Republic celebrates its centenary in 2049, it should be a “great modern socialist country” with an advanced economy. To achieve this ambitious goal, China will need to secure another three decades of strong economic performance and inclusive development. The question is how.
The first step toward answering this question is to understand what has driven China’s past successes. The list is impressive: three decades of double-digit GDP growth; a sharp increase in the urbanization rate, from 18% in 1978 to 57% in 2016; and plummeting poverty, according to China’s own standard, from 250 million people in 1978 to 50 million in 2016. At this rate, China will have completely eliminated poverty sometime next year.
But the People’s Republic did not thrive from the very start. On the contrary, Mao’s highly dogmatic and centralized approach, embodied in the disastrous Great Leap Forward and fanatical Cultural Revolution, not only prevented the country from advancing technologically; it pushed the economy to the brink of collapse.