China Leadership Monitor

The Political Consequences of Economic Challenges

Monday, October 1, 2012

China faces a growth slowdown with broad policy implications that are intertwined with the pending leadership succession. Central leaders are resigned to a growth slowdown, but do not have a clear strategy to deal with it. This provides an opening to reformers who argue that only substantial new market-oriented reforms can address the problems. There is a strong sense that Wen Jiabao’s era as an economic policy-maker is over and that he has left many difficult problems in his wake. Resolving those problems would require both determination on the part of the new leaders—who are as yet an unknown factor—and a new structure of representation of economic decision-makers on the Politburo Standing Committee.