China 2049: Economic challenges of a rising global power

David Dollar, Yiping Huang, and Yang Yao

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China is on track to be the world’s next economic superpower, but it faces tremendous challenges, such as fostering innovation, dealing with an aging population, and coping with a global environment skeptical of a more powerful People’s Republic. This policy brief draws from a forthcoming edited volume — “China 2049: Economic Challenges of a Rising Global Power” (Brookings Institution Press, May 2020) — which is the result of a collaborative effort among economists from China’s Peking University and the Brookings Institution. The book will offer in-depth analyses of these challenges and explore a number of essential questions: Does China have enough talent and the right policy and institutional mix to transit from an input-driven to innovation-driven economy? What does an aging population mean for the country in terms of labor supply, consumption demand, and social welfare expenditures? Can China contain environmental and climate change risks? How should the financial system be transformed in order to continuously support economic growth and keep financial risks under control?

The book contributors, listed in the appendix of this policy brief, also consider the roles state-owned enterprises play in the future Chinese economy, how technological competition between the U.S. and China will affect each country’s development, China’s future role in the international monetary system, and whether the U.S. and other established powers will accept a growing role for China and the rest of the developing world in the governance of global institutions such as the World Trade Organization and the International Monetary Fund.

“China 2049” will provide unique insights — summarized here — into independent analyses and policy recommendations by a group of top Chinese and American scholars. Whether China succeeds or fails in economic reform as it moves toward the 100th anniversary of the Communist revolution will have a large impact not just on China’s development, but also on stability and prosperity for the whole world.