Slower growth, an economy dangerously dependant on building infrastructure, and a widening gap between the rich and poor: China’s new leaders will be judged on how well they handle these outstanding problems. But there’s good news.
“The direction that china needs to take, more market openness and a more balanced economy, all of those are in sync with what the United States wants from China,” says Patrick Chovanec, a professor at Tsinghua University’s school of economics and management.
“If China moves away from this dependence on running surpluses and accumulating reserves, things that may boost growth but aren’t necessarily sustainable and shifts to a more balanced economy,” says Chovaec, “that actually creates demand for American goods, creates jobs for the United States.”
He says the challenge is that it’ll take a lot of political capital to make those changes. Qian Liu of the Economist Intelligence Unit in Beijing has hope in China’s new rulers.
“Judging from what we just saw, this new seven-man panel, there is a combination of both conservative and liberal embraces of these reforms, especially Xi himself,” says Liu.
Xi Jinping was governor of Fujian province and Party Secretary of Zhejiang province, two of China’s richest regions. In both jobs, he pushed forward economic reforms that fostered more competition in the marketplace. The question is how much of this model he’ll be able to copy and paste onto the rest of China.