China’s Economic Reform and Its Prospects

ZHENG Yongnian

Professor and Director of East Asian Institute, National University of Singapore

Abstract:

China’s economy can be characterized as having two correlated imbalances, i.e. imbalances in its domestic and international economic structures. It would be very difficult to identify a causal relationship between the two imbalances. In any case, this is an outcome of the past few decades. The same situation can also be found in other countries.
Where are China’s economy and its reform heading towards? At the macro-level, the economic policies guiding China’s economy and its performance are closely related to the two imbalances. One thing is for certain: world economic equilibrium will help balance various economies including China. But the world economy cannot automatically balance itself. Various economies must restore their balance before equilibrium can be achieved at the global level. For individual countries, balancing their domestic economy is what they can concentrate on.

In other words, China needs to rely on its own efforts to achieve internal economic balance through reform. Internal economic balance will promote sustainable development and contribute to the world economic balance. The question is where will such internal balance come from? How can China achieve an internal rebalance?

Key Words: economic reform, rebalance, social reform

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