Pakistani media: Challenges for new leaders

China's rapid economic development has lifted millions of people out of poverty and made it the world's second largest economy. But China needs a new path for a new century. It will be interesting to see whether China can surprise the world again in the next years, says an article in Pakistan's Daily Times. Excerpts:

China is set to have a new leadership for the next 10 years, which will formally be announced at the end of the 18th National Congress of the CPC.

China has made rapid economic progress, kick-started by Deng Xiaoping in 1979. Indeed, in terms of economic growth, China has sprinted over the last three decades at an average rate of 10 percent.

China, too, faced economic sluggishness in the wake of the global financial crisis, with millions of jobs lost because of recession in the United States and Europe. China's economic growth had been fueled by exports to the US, Europe and other countries and regions, making it the factory of the world. So when the global economy nose-dived, China suffered.

But with a large stimulus package of $584 billion in 2008 and investing in construction across the board (infrastructure, housing and local-level projects), China was able to keep up the economic momentum. (Besides, banks were asked to lend generously to local and regional governments.)

But this also caused problems, like inflationary pressures, mounting internal debt, and excess housing and production stocks, causing bubbles in some sectors. This, in turn, led the government to curb unwarranted spending to control the situation.

China's economic growth has slowed down to about 7.5 percent, still quite healthy but not like the 10 to 12 percent in the years before. The government is now initiating a less ambitious stimulus program to maintain economic momentum. In other words, the authorities are trying to engineer a soft landing for the economy to avoid any major eruption of social unrest.

China's new leadership has a hard task ahead to create new pathways. The government will need to address corruption in the country, and bridge the widening gap between the rich and the poor, and between the urban and rural areas.