China's New Normal: The Case for Trade and Competitiveness. Why Openness Still Matters?

Openness to trade, investment and even the movement of people is vital for prosperity, peace and individual freedom. And there have been few better moments in history to reconfirm the role of trade as central to global growth, job creation and development. Today's economic circumstances are full of challenges. China has come a long way since the 1978 election of President Deng Xiaoping heralded a new era of market-oriented reforms. From 1980 to 2010, its economy grew 18-fold, averaging 10 percent a year. It progressed from low-income to upper-middle income country status, lifting hundreds of millions out of poverty: by 2011 just 6 percent of people were in extreme poverty, compared with 61 percent in 1990. Recent developments - including the weakening of the yuan, the stock market crash, rapid credit growth, and a stalling property market - have cast some doubt on China's economic prospects. Yet a hard landing of the Chinese economy still seems unlikely. China has the opportunity to be a global leader in a number of important areas that will be cornerstones of global growth in the next decades and this is also challenge as well as threat for the United States, Japan and especially the European Union Member States.