By: Charles Wolf, Jr., K. C. Yeh, Benjamin Zycher, Nicholas Eberstadt, Sungho Lee, RAND Corporation, July 2003

Foreign Affairs, Nov/Dec 2003: Those who fear China should read this sobering assessment of the challenges that it may soon face.

International Affairs, January 2004: The RAND volume calmly describes, analyses and calculates the potential impact that the [present] problems will have on China's growth.

CHOICE, January 2004: It is certainly worth a look from China scholars. Recommended.

The authors consider how and by how much China's stellar economic performance might be impaired by eight potential adversities that China may face in the next decade.

Asiaing Links:

The Book Official Website

Book Contents (Divided PDFs, Downloadable):

Summary PDF  

All Prefatory Materials PDF

Chapter One:
Potential Adversities Confronting China's Continued Economic Growth PDF

Part I: China's Institutional and Structural Fault Lines

Chapter Two:
Massive Unemployment and Rural Poverty PDF

Chapter Three:
Economic Effects of Corruption PDF

Part II: Sectoral Fault Lines

Chapter Four:
Epidemic Disease: A Wild Card in China's Economic Future? PDF

Chapter Five:
Water Resources and Pollution PDF

Chapter Six:
GDP Effects of an Energy Price Shock PDF

Part III: Financial Fault Lines

Chapter Seven:
China's Fragile Financial System and the State-Owned Enterprises PDF

Chapter Eight:
Possible Shrinkage of Foreign Capital Inflows PDF

Part IV: Security Fault Lines

Chapter Nine:
Taiwan and Other Potential Conflicts PDF

Chapter Ten:
Conclusions: Fault Lines in China's Economic Terrain PDF

Supplementary Materials PDF

Book Description:

What are the major challenges, fault lines, and potential adversities (these terms are used synonymously), that China’s economic development will encounter over the next decade? How severely will China’s overall economic performance be affected if these adversities occur separately or in clusters? This book addresses these key questions. China has confronted in the past two decades five of the eight fault lines that the authors consider (unemployment, corruption, water resources, HIV/AIDS, and financial fragility), and, nonetheless, it has sustained high rates of economic growth. Therefore, in assessing the potential effects of these fault lines on China’s future economic performance, the authors focus on whether, why, and by how much their intensities may increase — that is, on changes, rather than on the prevailing levels of each fault line. For the other three fault lines examined, which have not previously occurred or recurred — oil price shocks, foreign-direct-investment shrinkage, and serious military conflicts-the authors consider the circumstances under which they might arise and their resulting economic effects.

About the Author:

Charles Wolf, Jr. (Ph.D., Economics, Harvard University), founding Dean of the RAND Graduate School, is a senior economic adviser and corporate fellow in international economics at RAND and professor in the RAND Graduate School.

Benjamin Zycher (Ph.D., Economics, University of California, Los Angeles) is a senior economist, Economics and Statistics Group, at RAND.

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