The Economics of China’s New Era
With the age of Western global dominance coming to an end, it is China’s time to shine. The potential is certainly there, but to realize it, President Xi Jinping will have to confront serious challenges, from domestic supply-side reforms to expanding international responsibilities.
BEIJING – In his opening speech at October’s 19th National Congress of the Communist Party of China, President Xi Jinping argued that China had “crossed the threshold into a new era.” He then pledged to build a “great modern socialist country” that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful by mid-century, led by an empowered CPC, but open to the world.
These are bold aspirations, though if anyone is in a position to deliver them, it is Xi, now widely regarded as the most powerful Chinese leader since Mao Zedong. But the specifics of Xi’s plan remain unclear. What will it take for China to modernize effectively in this new era?
Out with the Old?
The era may be new, but one of the trends that will define it is already well underway: China’s dual-track transition from a planned to a market economy. Continued progress on this front is vital to boost stability, capitalize on China’s comparative advantages, and spur rapid socioeconomic development, thereby paving the way for deep institutional reform.