HRS Household responsibility system

ICOR Incremental capital-output ratios

ICT Information and communication technology

IMF International Monetary Fund

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IT Information technology
KBA Key biodiversity areas
KWh Kilowatt hour
LED Light-emitting diode
LFPR Labor force participation rate
M&A Mergers and acquisitions
MFN Most-favored nation
MIIT Ministry of Industry and Information Technology
MSME Micro, small, and medium enterprises
NBSC National Bureau of Statistics of China
NBFI Nonbank financial institutions
NDRC National Development and Reform Commission
NO2 Nitrous oxide
NPL Nonperforming loan
OECD Organisation of Economic Co-operation and Development
OPEC Organization of Petroleum Exporting Countries
PBC People’s Bank of China
PISA Programme for International Student Assessment
PM10 Small particulate matter
PPP Purchasing power parity
PSU Public service unit
R&D Research and development
ROE Return on equity
RMB Renminbi
SAMC State asset management company
SASAC State Owned Assets Supervision and Administration Commission
S&T Science and technology
SFI State financial institutions
SME Small and medium enterprise
SO2 Sulphur dioxide
SOE State-owned enterprise
TCE Tons of coal equivalent
tCO2 Tons of CO2
TFP Total factor productivity
TVET Technical and vocational education and training
UDIC Urban Development Investment Corporations
UN United Nations
UNEP United Nations Environment Programme
VAT Value added tax
WIPO World Intellectual Property Organization
WTO World Trade Organization
 Part I

Overview

China 2030:
Building a Modern, Harmonious,
and Creative Society
 China 2030:
Building a Modern, Harmonious,
and Creative Society
 overview 4

Introduction
From the early 1500s until the early 1800s, China’s economy was the world’s largest. By 1820, it was one-fifth
again as big as Europe’s and accounted for a third of world gross domestic product (GDP). But the next two
centuries were tumultuous for China. The country experienced catastrophic decline between 1820 and 1950 and
then, starting in 1978, meteoric rise (Maddison 2001). Today, China is once again among the largest economies of
the world, having overtaken Japan in 2010. Its economy is now second only to that of the United States (third, if the
European Union [EU] is counted as one economy), and it is the world’s largest manufacturer and exporter. The East
Asian miracle may have lost some of its luster after the financial crisis of 1997–98, but China’s performance
continues to impress. Even if China grows a third as slowly in the future compared with its past (6.6 percent a year
on average compared with 9.9 percent over the past 30 years), it will become a high-income country sometime
before 2030 and outstrip the United States in economic size (its per capita income, however, will still be a fraction
of that in advanced countries). If China achieves this milestone, it will have avoided the “middle-income trap” by
traversing the seemingly impossible chasm between lowincome and high-income status within a generation and a
half—a remarkable achievement for any country, let alone one the size of China.
But two questions arise. Can China’s growth rate still be among the highest in the world even if it slows from its
current pace?
And can it maintain this rapid growth with little disruption to the world, the environment, and the fabric of its own
society? We answer “yes” to both, but only if China transitions from policies that served it so well in the past to
ones that address the very different challenges of a very different future.
This overview, followed by five supporting reports, identifies these challenges of tomorrow,
points to key choices ahead, and recommends