Restructuring and Reform: China 2016

Since 2010, China has been grappling with the consequences of the end of the miracle growth era. Economic conditions are changing extremely rapidly. It is obvious that the potential growth rate has been declining for several years, but the associated changes flowing through the economy are complex. The challenge for policymakers is to respond to these dynamic and multidimensional changes, helping to unlock new sources of demand while buffering the shock to declining industries. We know from the experience of Japan and South Korea that adapting to the end of miracle growth is challenging and that finding the appropriate policy mix in this transition is extremely difficult. Indeed, we probably know more about how such policy responses fail than about how they succeed.