Summary of Global Clout, Domestic Fragility

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Global Clout, Domestic Fragility summary

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China’s continuing success hinges on its ability to repair domestic fault lines in its economy. An aging population, rural communities left behind by increasing urbanization, dependence on fossil fuels and an outdated financial system better equipped to underwrite state-owned companies than start-ups – all imperil a strong upward trajectory in the nation’s economy. Academics David Dollar, Yiping Huang and Yang Yao illuminate China’s weak spots and its way forward in this incisive analysis.

About the Authors

David Dollar is a senior fellow at the Brookings Institution. Yiping Huang and Yang Yao are professors at Peking University.

Summary

China is a global powerhouse that faces critical issues at home.

China finds itself at a watershed moment: The continued viability of its economic model hinges on how it confronts a number of domestic difficulties. China’s population is graying quickly, and its labor force is shrinking due to declining fertility rates. 

A relaxation in the one-child policy notwithstanding, high housing and education costs have led many couples to have no more than one child, if any. The next several decades will see a sharp increase in the number of those aged 65 and older. 

The problems of an aging population and increasing urbanization are interrelated...


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