A Growth Agenda for China

By A. Michael Spence and Qian Wan

...achieving faster, more resilient growth will require China to eliminate the biases, protections, and implicit guarantees favoring SOEs in the marketplace and in the financial system.

At a time when the United States is poised to turn inward, China’s economic performance is more important globally than ever. Whether China can achieve sustainable growth patterns in the coming years will depend upon a number of key factors.

One of the leading external factors shaping China’s prospects will be its relationship with the US under President Donald Trump. Ideally, the two governments would work together to negotiate mutually beneficial trade and investment agreements, with sensitivity to the challenges faced by both sides. But the opposite outcome – the escalation of mutually damaging trade and investment disputes – is also a distinct possibility.

Political uncertainty is also on the rise in Europe. While its impact on China would not be as direct as Trump’s actions, it is a source of significant medium-term risks for the entire global economy.

Read the full article as published in Project Syndicate.

A. Michael Spence is a William R. Berkley Professor in Economics & Business.