China’s socialist market economy is the world’s second largest economy by nominal GDP, and the world’s largest economy by purchasing power parity according to the IMF. Until 2015 China was the world’s fastest-growing major economy, with growth rates averaging 10% over 30 years.
Key economic indicators show that China is the largest trading nation in the world and plays the most important role in international trade despite a slowdown in 2016. New targets and policies continue to strengthen China’s efforts to shift to a more sustainable model of growth.
China is not that happy as it has been criticized by Western media for unfair trade practices, including artificial currency devaluation, intellectual property theft, protectionism, and local favoritism due to one-party oligopoly by the CPC and its socialist market economy. Fifteen years after China joined the WTO, The US, Europe and Japan have refused to recognize China’s market economy status. President-elect Donald Trump has repeatedly lashed out at China and threatened to declare Beijing a currency manipulator and impose punitive tariffs on its exports amounting to hundreds of billions of dollars.
Chinese leaders are trying to work out Donald Trump’s policy on China as they are paying more attention to domestic issues.
According to DRC (The Development Research Center of the State Council ), China is currently at an important stage with changes in the economic growth pattern and is trying hard to achieve sustainable development.
The general development trend of China’s population spatial distribution between 2010 and 2015 indicates that migration movement has become more multi-dimensional, with more people moving to central and western regions with relatively fast economic development. As people intend to migrate to big cities, urban population density in many provinces has become tangible.
As China’s economic development has entered the new normal, the inside and outside environment has changed prominently. And divergence among regions has become much more prominent due to different development stages and capacities.
With the transformation of China‘s economic development entering the state of new normal, people in various regions have taken “innovation” as the top issue in their daily work. Transformation to innovation-driven economy is an important way for China to address challenges.
DRC study suggests that new strategic areas bear huge significance for adapting to and guiding the new normal and promoting steady and continued economic growth. To accelerate the building of new strategic zones is not only the urgent corresponding measure to be taken to adapt to the economic new normal, but also the inherent need to lead the economic new normal and improve China’s international competitiveness.
Among others, to divide functions and powers between central and local governments according to the range of administrative influence is the major approach applied in the on-going reform.
To safeguard its legality as the ruling power, the CPC still holds tight to economic development as its first priority in its government work.
China’s economy is now like a fast train placed onto a high-speed track. There are two factors that might bring it to a full stop, a third world war and a collapse of communist regime, which is very unlikely in 30 years. A steady political reform seems inevitable to lead the economy towards a healthy development. The whole world has kept an eye on these developments.