6. The Current Balance

This chapter provides a detailed picture of China’s economic position as it stands today. In so doing, the chapter not only details the various ways of measuring economic growth but also how sustainable this growth is in relation China’s industrial structure. It therefore examines both internal and external challenges confronting China. The internal issues include the Lewis turning point: an aging population, a weakness in the high-tech sector, an over-reliance on foreign companies for exports, non-performing loans, and burgeoning state debt. Externally, the chapter highlights the challenging external environment China now faces—growing pressure to realign its currency; a greater number of trade investment and intellectual property disputes; a more hostile security environment; an increasing number of firms relocating; and exclusionary regional trans-Pacific and trans-Atlantic trade agreements.