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Thursday, February 08, 2018

McKinsey on China in 2018

What can we expect in China in 2018?
By Gordon Orr in McKinsey

The nation could be shaped by geopolitics, momentum from robust economic growth, and a host of new leaders eager to implement new policy.

With so many new leaders put in position over the last six months by President Xi, an overall leader secure in his position and clear on his objectives, 2018 is likely to see much more activity to implement policies, economic and social, that move China in the direction that Xi wants. We may need to worry more about overenthusiastic implementation of policy than the inaction we have often seen in 2017.

Again, the year could well be shaped by geopolitical discontinuities. Opportunities for Chinese companies to invest overseas have diminished in a number of markets, but as of yet, opportunities for trade have not been materially restricted by the governments of importing countries. Relations with Japan and the United States remain volatile, with the potential for damaging discontinuities in trade and investment.

Yet China enters 2018 with robust economic-growth momentum. Despite stresses that we highlighted last year, which have only grown—regional disparities, an aging population, declining heavy-industrial sectors, property bubbles, growth in debt levels, and continuing environmental pollution—China remains slightly ahead of track of its goal to double GDP between 2010 and 2020 and to realize its self-declared ambition to become a “moderately prosperous” country. .... "

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