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China’s Economic Challenges Over the Next Five Years

  • Author Seung Shin Lee
  • Series249
  • Date2022-10-28
At the 20th National Congress of the Communist Party of China held in October this year, President Xi Jinping's third consecutive term was decided. As President Xi's one-man control system is firmly established, there are also concerns about the future direction of the Chinese economy. This article reviews the transformation and changes of Chinese economy from the perspective of Xi’s governance philosophy and policy adjustment process, concluding with a discussion of possible developments and changes in Chinese economy.
Emphasizing top-level design is a characteristic of the Xi era, with stress being placed on comprehensiveness and systematicity. In 2021, after the Chinese authorities basically completed the task of alleviating poverty, addressing the immediate problems of high expenditures related to housing, education, and health care, they launched a series of policies to advance towards common prosperity. The key to China's development is the bottleneck of its own growth. The outside world generally does not doubt China's ability to control economic fluctuations in the short-term, but there is not much confidence about whether China can achieve a balance between Zero-COVID policy and economic development, because this involves President Xi Jinping's long-term concept of governing the country. The strategic containment pressure exerted by the United States from the outside may allow him to use the power of nationalism to consolidate his leadership position, but the state-led economic growth model it has gradually shaped will provide space for rent-seeking and monopoly of state-owned enterprises. Suppressing the vitality of innovation and development of private enterprises is not conducive to long-term economic growth and common prosperity.
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