Sustaining China’s High Economic Growth: Challenges and Risks for the New Leadership

John Wong

Abstract

Although China may have high warranted growth potential over the medium and long run, it does not necessarily mean that high growth can be easily sustained. For the Hu-Wen leadership to realize China’s future economic growth potential, it must strive to overcome a number of constraints and obstacles which can be highlighted under two broad fronts: institutional constraints and social-economic risks.

At the 16th Party Congress in 2002, the party leadership put forth the concept of building a Xiaokang Shehui (a moderately affluent society) as its medium-term goal. Premier Wen Jiabao gives priority attention to tackling the “rural problem” and “regional development problem”. However, it is obviously that the Hu-Wen leadership, in its efforts to sustain high economic growth problems, will continue to face mounting political and social challenges. It is not certain how these challenges could moderate or threaten the overall economic growth process. But the chance of maintaining high growth momentum remains good. In this way, Hu and Wen also stand a good chance of muddling through.

Keywords:China' seconomic growth, institutional reforms,democratization, income disparity