The recent predictions on China´s economic development could not have been more different. The Conference Board predicts gloom. The Asia Society finds China is ready for sweeping reforms. Our financial analyst Sara Hsu sees slower growth, but also room for reforms, she writes in the Diplomat.
It appears as unlikely that China will maintain growth levels of 10 percent as that it will maintain growth levels below 5 percent in the coming decade, since the Chinese style of pragmatic experimentation has worked for more than thirty years. Although there is uncertainty in the air, it would be a mistake to underestimate China’s ability to rally its policy organs to implement change. The fact that China was able to transform from a virtually closed, impoverished nation to one of the most successful exporting nations in the world, and from a country that altogether rejected the private economy to one with a “market economy with Chinese characteristics” demonstrates the ongoing capacity of the state to alter the fundamental nature of the economy.
Certainly, analysts who question China’s ability to continue its dramatic reform process point to the lackluster leadership of Hu Jintao. Hu was viewed as an anti-reformist fearful of social instability aroused by change. However, Xi put forth a strong agenda at the Third Plenum last October, and, along with Premier Li Keqiang, continues to underscore the need for economic change. Despite the presence of uncertainty right now, there is reason to believe that those low-ball growth numbers that assume no significant reforms have little basis in fact.
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