China's economy has demonstrated extraordinary resilience in the face of the global economy slowdown, the SARS tragedy, and the stresses of WTO entry. This resilience results from the successful shift to domestic-led growth and from rising productivity caused by economic reform, rising competition, and highly entrepreneurial economic structure, and high levels of foreign direct investment. China's successes are being achieved by reforms that overcome severe challenges. Among these challenges are a pressures on China to revalue its currency and China's rapidly expanding money supply and overheating economic expansion. What distinguishes China from other countries facing similar challenges is that it has chosen a process of gradual reform and opening that has proved successful in other Asia countries. It has also demonstrated an ability to form a workable leadership consensus regarding its most important problems, to implement solutions in the face of great political and social stress, and to overcome the stress by delivering large benefits for most of the Chinese people.
Originally published in: Harvard China Review, Vol. V, Issue 1, Spring 2004, 47-52.
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