Three Threats to China’s Success

What’s the Big Idea?

Over the past decade, the Chinese economy has grown at an annual rate of ten percent which, in the wake of the global economic crisis, has been a crutch for the world to lean on. “World Bank chief economist Justin Yifu Lin says China accounted for about one-quarter of global growth between 2000 and 2009, edging out the U.S. for the top spot, and well ahead of any other nation.” But its continued success is not guaranteed—rising nations have the ability to flame out. That could spell trouble not only for China but for the world economy. 

What’s the Latest Development?

As the International Monetary Fund meets this week in Washington, authorities may do well to look at current soft spots in the Chinese economy. Bob Davis at The Wall Street identifies three: China’s property prices have risen by fifty percent in its major cities during the last two years alone, laying the foundation for fears of a massive real estate bubble burst; China’s massive infrastructure investment during the last decade may be losing steam and whether the country will continue to prosper may depend on how well leaders transition the economy to focus on domestic demand; should recent crackdowns in China foment political unrest, there is no telling what damage it could do the economy.