ABSTRACT
The Chinese economy has recorded more than four decades of rapid growth, which lifted hundreds of millions out of poverty and dramatically increased the quality of life for everyone. Since a number of countries strive to emulate Chinese economic success, it is important to understand the main drivers of its performance. The processes of decentralization and experimentation have been instrumental in finding the most efficient and suitable policies. At the same time, Chinese economic development was not always smooth; on the contrary, it was characterized by a number of setbacks. While the Chinese economy continued to grow at a high pace until the COVID-19 pandemic, a number of structural issues have presented challenges for the leadership. In particular, the traditional drivers of Chinese economic growth, exports, and infrastructure investment are no longer able to propel economic growth. Macroeconomic policies of rebalancing, supporting domestic consumption, encouraging innovation, and adopting new technologies are slowly being implemented in order to sustain high growth rates. However, the COVID-19 pandemic and the related public health policies have posed major challenges to Chinese economic development, and it remains to be seen how the government will navigate through this period.
