Institutional Reforms the Key to Growth, Stability

There is wide recognition that the policies and institutions that have served China well over the past three decades require radical change and reform if China is to sustain progress to high-income status. The slower growth rate of the past year and the likelihood of even slower but still substantial rates in the future is not itself a major problem. Middle-income countries, for a variety of reasons, cannot sustain GDP growth rates of 9–10 per cent per year decade after decade, even if they do ‘everything right’.