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We shall be unable to turn natural advantage
to success unless we make use of local guides.
-The Art of War, Sun Zi

China’s Goals & Key Challenges – and the opportunities they generate!

China’s Goals & Key Challenges – and the opportunities they generate!
February 2018

China’s regularly announced and never happening financial crisis

There is no doubt that China’s increase in debt is alarming by the speed at which it is happening. Besides, it is a new phenomenon. It happened during the last 10 years only. Before 2008, China’s impressive double digit growth was generated while keeping debt stable with respect to GDP.

Surely, no leader can feel comfortable with such a curve. Why, then, did this happen?

This unprecedented acceleration in debt levels is the answer that China’s leadership could give to the new international economic situation following the 2008 world crisis. With the drop in export markets, growth could only be maintained through an extraordinary increase in domestic projects spending.

Indeed, increasing China’s population living standards, until they reach levels comparable to those of the Western world, is one overarching goal of the Communist Party. This commitment to provide a better life to the Chinese, along with the restoration of China’s national pride, are the key terms of the unwritten contract that the government has passed with its population. This “Compact with China” affords the leadership its most critical legitimacy and ensures social stability.

In Deng Xiaoping’s words: “development is the irrefutable argument”.


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