By Hou Yongzhi and Zhang Junkuo, the Development Research Center of the State Council

Research Report No 143, 2011

Abstract:

There are many advantages for China in getting past the middle income stage, namely, a large domestic market, late-mover advantages and a strong learning ability, open economy, industrious and frugal people, innovative ability, and a State system that fits the national situation.

The challenges are greater financial risk from lower economic growth rate, large social turbulence, weakened environmental capacity, changing international political conditions, and increasing possibility of China being involved in global political and military conflicts.