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China’s economic performance during the reform period is sometimes described as a miracle (Lin et al 1995). Its GDP per capita increased from $220 in 1980 to $6,000 in 2012. Not only is it now the world’s second largest economy, but it also contributes at least one-third of global economic growth in recent years. China is already a major player in global markets for luxury goods, labor-intensive manufacturing exports, commodities and even foreign exchange. Many economists are optimistic that China can continue its rapid economic growth, albeit at somewhat slower pace, in the coming decades (Perkins and Rawski 2008; Lin 2011).

The New Normal of Chinese Development