To what extent can innovation and global economic dominance mitigate China’s structural slowdown?

China’s economy stands at a crossroads. On the one hand, the country is faced with enormous challenges, ranging from a ballooning local government debt, population aging, reduced access to critical technologies, to adverse effects from Covid-19. At the same time, the central government is committed to enhance China’s competitiveness by investing heavily in its STI capacity. Will this be enough to prevent its economy from being trapped in long-term stagnation?

On the international front, China has been strengthening its position substantially by lending to emerging economies, and by setting up the infrastructure for the gradual internationalisation of the Renminbi. Its position in trade and investment networks has become more central. But can China’s growing international influence counteract global geoeconomic fragmentation?

We aimed to shed light on these questions by sharing with you the results of our most recent research on China’s future domestic and international status, conducted under the umbrella of a three-year research project on China, project China Horizons - Dealing with a resurgent China (DWARC)*.

This is an output of China Horizons, Bruegel's contribution in the project Dealing with a resurgent China (DWARC). This project has received funding from the European Union’s HORIZON Research and Innovation Actions under grant agreement No. 101061700.