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What are the major challenges, fault lines, and potential adversities (these terms are used synonymously), that China's economic development will encounter over the next decade? How severely will China's overall economic performance be affected if these adversities occur separately or in clusters? This book addresses these key questions. China has confronted in the past two decades five of the eight fault lines that the authors consider (unemployment, corruption, water resources, HIV/AIDS, and financial fragility), and, nonetheless, it has sustained high rates of economic growth. Therefore, in assessing the potential effects of these fault lines on China's future economic performance, the authors focus on whether, why, and by how much their intensities may increase — that is, on changes, rather than on the prevailing levels of each fault line. For the other three fault lines examined, which have not previously occurred or recurred — oil price shocks, foreign-direct-investment shrinkage, and serious military conflicts-the authors consider the circumstances under which they might arise and their resulting economic effects.
Table of Contents
Summary
Preface
All Prefatory Materials
Chapter One
Potential Adversities Confronting China's Continued Economic Growth
Part I
China's Institutional and Structural Fault Lines
Chapter Two
Massive Unemployment and Rural Poverty
Chapter Three
Economic Effects of Corruption
Part II
Sectoral Fault Lines
Chapter Four
Epidemic Disease: A Wild Card in China's Economic Future?
Chapter Five
Water Resources and Pollution
Chapter Six
GDP Effects of an Energy Price Shock
Part III
Financial Fault Lines
Chapter Seven
China's Fragile Financial System and the State-Owned Enterprises
Chapter Eight
Possible Shrinkage of Foreign Capital Inflows
Part IV
Security Fault Lines
Chapter Nine
Taiwan and Other Potential Conflicts
Chapter Ten
Conclusions: Fault Lines in China's Economic Terrain
Supplemental
Supplementary Materials
Research conducted by
The research described in this report was sponsored jointly by the Office of Net Assessment in the Department of Defense and the Smith Richardson Foundation. The research was conducted in RAND's National Defense Research Institute, a federally funded research and development center.
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