TOC:
Executive Summary __________________________________________________________________________ 4
Chapter 1. Past drivers of economic growth _____________________________________________________ 6
Chapter 2. Seven challenges facing China’s economic transformation ______________________________ 11
Challenge 1. Export-led model exhausted ___________________________________________________________________________ 11
Challenge 2: Diminishing labour cost advantages _____________________________________________________________________ 14
Challenge 3: Increasing constraints from resources and the environment _________________________________________________ 19
Challenge 4: Income and wealth disparity __________________________________________________________________________ 25
Challenge 5. Difficulties in continuing investment-led growth __________________________________________________________ 28
Challenge 6: Financial risks rising _________________________________________________________________________________ 33
Challenge 7: Government is less able to engineer growth ______________________________________________________________ 36
Chapter 3. Major reforms to overcome challenges ______________________________________________ 38
Political reform after the 18th Party Congress _______________________________________________________________________ 38
Fiscal reforms: facilitating economic transformation _________________________________________________________________ 46
Income/Wealth distribution reform _______________________________________________________________________________ 55
Financial reform _______________________________________________________________________________________________ 59
Chapter 4: Estimating potential growth ________________________________________________________ 62
Data and methodology __________________________________________________________________________________________ 62
Capital growth was the primary engine of potential growth in the past __________________________________________________ 63
7% potential growth from 2011 to 2020 ____________________________________________________________________________ 64