Can its leaders navigate a soft landing?
China’s headlong leap into the ranks of the world’s largest economies has slowed since the severe global recession of 2008, with real gross domestic product growth falling from 10.6 percent in 2010 to an estimated 6.6 percent this year. Chinese leaders are struggling to cope with the lower growth, along with rising debt, a loss of jobs to lower-wage countries and the need to institute more market-oriented reforms. The country’s difficulties have generated economic shock waves throughout the world, from financial markets in New York and London to commodity exporters in Brazil, Australia and central Africa. As China and other nations try to handle the situation, here are the key takeaways:
The years of China’s 10-percent-plus annual growth are over, and Chinese leaders must manage lower growth without creating serious disruption, internally or globally.
President Xi faces conflicting impulses to reduce state control of the economy while preserving government and Communist Party authority.
How China resolves these issues will reverberate from Australia to Latin America to Africa; one study estimates China will contribute almost 39 percent of total global GDP growth this year.
Hung, Ho-Fung, “The China Boom: Why China Will Not Rule the World,” Columbia University Press, 2015. An associate sociology professor at Johns Hopkins University uses historical, sociological and political analysis to explain how much China depends on the existing economic order and how the interests of Chinese elites maintain those ties.
Kroeber, Arthur R., “China’s Economy: What Everyone Needs to Know,” Oxford University Press, 2016. An economics journalist and researcher offers a primer on how China’s economy grew and the implications for its slowdown.
Lardy, Nicholas R., “Markets Over Mao: The Rise of Private Business in China,” Peterson Institute for International Economics, 2014. A senior fellow at the Peterson Institute traces the institution and practice of private entrepreneurship in post-Maoist China.
McGregor, Richard, “The Party: The Secret World of China’s Communist Rulers,” Harper, 2010. A Financial Times writer deconstructs the secret world that influences China’s economy, military and local governments, highlighting the corruption and tension that keep the party from evolving.
Naughton, Barry, “The Chinese Economy: Transition and Growth,” MIT Press, 2007. A classic economic history by the Sokwanlok chair of Chinese international affairs at the University of California, San Diego, explains China’s economic experiments, failures and successes from the post-Qing era to the early 2000s.
Osnos, Evan, “Age of Ambition: Chasing Fortune, Truth, and Faith in the New China,” Farrar, Straus and Giroux, 2014. Winner of the Pulitzer Prize and the National Book award, this work by a New Yorker staff writer follows several Chinese citizens as they negotiate a turbulent era of individual attainment amid the Communist Party’s quest for control.
Spence, Jonathan D., “The Search for Modern China (Third Edition),” W.W. Norton and Co., 2012. A Yale University history professor emeritus outlines China’s political, economic, social and cultural past in a dazzling narrative.
Back to Business: Special Report, Business in China,” The Economist, Sept. 12, 2015, http://tinyurl.com/
“The New Class War: Special Report, Chinese Society,” The Economist, July 9, 2016, http://tinyurl.com/
de Jonquieres, Guy, “The Problematic Politics of China’s Economic Reform Plans,” International Journal of China Studies, August 2014, pp. 399-412, http://tinyurl.com/
Reports and Studies
“China 2030: Building a Modern, Harmonious, and Creative Society,” World Bank and Development Research Center of the State Council, People’s Republic of China, 2013, http://tinyurl.com/
“China’s Economic Rise: History, Trends, Challenges, and Implications for the United States,” Congressional Research Service, Oct. 21, 2015, http://tinyurl.com/
“China’s Environmental Crisis,” Council on Foreign Relations, Jan 18, 2016, http://tinyurl.com/
“China-U.S. Trade Issues,” Congressional Research Service, Dec. 15, 2015, http://tinyurl.com/
Barton, Dominic, et al., “Mapping China’s Middle Class,” McKinsey Quarterly, June 2013, http://tinyurl.com/
The Next Step
Debt and Economic Risks
Lanman, Scott, “China’s Holdings of U.S. Treasuries Fall to Lowest Since ‘13,” Bloomberg, Sept. 16, 2016, http://tinyurl.com/
Magnier, Mark, “Warning Sounded Over Chinese Economy,” The Wall Street Journal, Sept. 28, 2016, http://tinyurl.com/
Taylor, David, “China warned to rein in growing mountain of debt or risk triggering another global financial crisis,” ABC News, Sept. 26, 2016, http://tinyurl.com/
Blanchard, Ben, “Mayor of China’s Tianjin investigated on suspicion of corruption,” Reuters, Sept. 10, 2016, http://tinyurl.com/
Chin, Josh, “Retired Chinese General Sentenced to Life in Prison for Corruption,” The Wall Street Journal, July 25, 2016, http://tinyurl.com/
Martina, Michael, “China puts new focus on illicit assets in corruption fugitive hunt,” Reuters, Sept. 20, 2016, http://tinyurl.com/
Harrabin, Roger, “China embarked on wind power frenzy, says IEA,” BBC, Sept. 20, 2016, http://tinyurl.com/
Hernandez, Javier C., “Chemical Accidents in China Have Killed Nearly 200 This Year, Report Finds,” The New York Times, Sept. 21, 2016, http://tinyurl.com/
Vaughan, Adam, “China tops WHO list for deadly outdoor air pollution,” The Guardian, Sept. 27, 2016, http://tinyurl.com/
Economic and Political Reforms
“China cuts consumption tax on cosmetics to stir growth,” Reuters, Sept. 30, 2016, http://tinyurl.com/
“China launches $52.5 billion fund to restructure state enterprises,” Reuters, Sept. 26, 2016, http://tinyurl.com/
Wei, Lingling, “China Unveils Economic Blueprint for 2016,” The Wall Street Journal, Dec. 21, 2015, http://tinyurl.com/
American Chamber of Commerce in the People’s Republic of China
The Office Park, Tower AB, 6th Floor, No. 10 Jintongxi Road, Beijing 100020
A trade association for American businesses in China.
725 Park Ave., New York, NY 10021
A cultural and educational organization offering lectures and classes on arts, business, culture and policies; has additional locations in Shanghai and Hong Kong.
The Brookings Institution
1775 Massachusetts Ave., N.W., Washington, DC 20036
A nonprofit public policy research organization that has a sister center in Beijing.
Center for Global Economy and Business
Henry Kaufman Management Center, 44 W. Fourth St., New York, NY 10012
The division of the Stern School of Business at New York University promotes faculty research concerning global aspects of modern economies and business. Its China initiative offers specialized information on that country.
Council on Foreign Relations
The Harold Pratt House, 58 E. 68th St., New York, NY 10065
A nonpartisan membership organization that conducts research, sponsors discussions and publishes the journal Foreign Affairs.
International Monetary Fund
700 19th St., N.W., Washington, DC 20431
A global financial organization that conducts research and publishes extensive data.
1776 Main St., Santa Monica, Calif. 90401
A nonprofit think tank that conducts research and analysis.
1818 H St., N.W., Washington, DC 20433
A global financial institution that loans money to developing nations.