Henry Rowen

China: Big Changes Coming Soon

Big changes are ahead for China, probably abrupt ones. The economy has grown so rapidly for many years, over 30 years at an average of nine percent a year, that its size makes it a major player in trade and finance and increasingly in political and military matters. This growth is not only of great importance internationally, it is already having profound domestic social effects and it is bound to have internal political ones — sooner or later.

Two kinds of changes are in store: political and economic. The order in which they occur will affect their impacts, and that order is very uncertain. In any case, big discontinuities are likely before 2020.

Social Changes

Sooner versus later can make a large difference. It is one thing to believe that China’s growth will lead eventually to political change (Deng Xiaoping told George Shultz in 1988 that China would become a democracy in 50 years, perhaps meaning: “Forget about it.”), but is quite another matter to expect political change within this decade — an argument made here. But things are not so simple (they never are); another line of argument, discussed below, is that there is a good chance of an abrupt economic slowdown over this period. One should not expect these conjectured events to be independent; political turbulence would hurt the economy and a sharp economic slowdown would surely have political consequences. The interplay between these two prospects, a political disruption and/or an economic jolt, can only be a matter of speculation, and some is offered here.

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