China 2020 Development Challenges in the New Century

China is in the throes of two transitions: from a command economy to a market-based one and from a rural, agricultural society to an urban, industrial one. So far, both transitions have been spectacularly successful. China is the fastest-growing economy in the world, with per capita incomes more than quadrupling since 1978, achieving in two generations what took other countries centuries. Although swift growth and structural change have resolved many problems, they also have created new challenges: employment insecurity, growing inequality, stubborn poverty, mounting environmental pressures, rising costs of food self-sufficiency, and periods of macroeconomic instability stemming from incomplete reforms. Unmet, these challenges could undermine the sustainability of growth, and China�s promise could fade. China 2020, a seven-volume set, examines China's recent history, where it is today, and the path it should follow during the first two decades of the 21st century. The first volume in the set, "China 2020: Development Challenges in the New Century", provides an overview of the country�s strengths and weaknesses as well as its obstacles and options. The report argues that China can meet these challenges and sustain rapid growth, mainly because of its strengths: relative stability, a remarkably high savings rate, a strong record of pragmatic reforms, a disciplined and literate labor force, a supportive Chinese diaspora, and growing administrative capacity. These strengths have driven the country's growth for the past two decades and can continue to do so over the next two. To nurture these strengths and use them effectively, however, reforms must develop in three related areas: the spread of market forces must be encouraged; the government must begin serving markets (by building the legal, social, physical, and institutional infrastructure); and integration with the world economy must be deepened. The six other volumes in the series examine these challenges in detail.World Bank Staff is the author of 'China 2020 Development Challenges in the New Century' with ISBN 9780821340431 and ISBN 0821340433.