The Paradox of China's Fast Growth

To sustain economic growth, the Communist party's top priority, domestic consumption must increase. That means giving people more power over their own money, i.e. market liberalization.

What's the Latest Development?

It is the Year of the Dragon but to capitalize on the presumed good luck, China will have to begin a fundamental transformation of its economy. The cheap labor and land that have fueled the boom of the last two decades are running thin. In order to sustain economic growth, which the Communist Party widely believes is essential to its continued existence, a new economy emphasizing domestic consumption must emerge. That means more individual spending power and less money lining the coffers of state banks and businesses.

What's the Big Idea?

In order to prevent the world's largest population from rising up in revolt, the Chinese Communist Party must keep growth alive. That means instituting further market reforms that empower the individual, rather than society. Already, migrant workers are looking to retain their rights to education, health and pensions as they move around the country. A more transparent government and the freedom to organize a labor union against it are changes that should occur naturally, if the government is wise enough to allow them to.

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