China’s Economic Development in the New Era: Challenges and Paths

Abstract China’s economy has seen rapid development ever since its reform and opening-up strategy was launched in 1978. Strong economic expansion over the past four decades has taken China from low-income to upper-middle-income status. Looking back at the transformation that China has made, however, we must recognise that the old growth story is coming to an end. The phase of development driven by investment in physical capital will be increasingly supplanted by investment in assets such as knowledge and social capital as well as investment in preservation of natural capital. Recognising the challenges that China is facing, with this paper we aim to offer an approach to growth and development that could spell out a new development strategy for the country as the 21st century progresses. China will focus on the technologies with high-quality growth prospects: modern service sectors, including health, education, transport, communications and IT, artificial intelligence, finance, logistics, sustainable urban infrastructure and new food and land-use systems. With today’s technologies, China can help the Belt and Road Initiative (BRI) countries embark on a much more sustainable, more efficient and greener form of development, avoiding historical problems of pollution and congestion, with China itself moving up the value chain at the same time.