Andrew Sheng — China’s Next Transformation

During three decades of favorable global economic conditions, China created an integrated global production system unprecedented in scale and complexity. But now its policymakers must deal with the triple challenges of the unfolding European debt crisis, slow recovery in the United States, and a secular growth slowdown in China’s economy. All three challenges are interconnected, and mistakes by any of the parties could plunge the global economy into another recession.

To assess the risks and options for China and the world, one must understand China’s “Made in the World” production system, which rests on four distinct but mutually dependent pillars.

Project Syndicate
China’s Next Transformation
Andrew Sheng and Geng Xiao

China's first phase seems to be coming to a close. Can it make it through the transition to the next stage seamlessly or will there be problems?