The chapter provides an overview of past policies that transformed China and highlights how that transformation has created new—and more difficult—challenges. It suggests that there is agreement in China that further reforms are needed, but there appears to be little consensus on what to change, what to preserve, how fast or how far to go in making changes to the system, or even on what the ultimate destination should be. China needs fundamental reforms in many policy areas but the current inclination is to defer tackling them for as long as possible. Indeed, much of what Beijing is doing, both internally and externally, seems intended to buy time by reverting to recentralization, tighter control, and the export of excess capacity while hoping that conditions will become more propitious for deeper reform in the future. In the meantime, the regime faces myriad challenges and choices. The central thesis of the book is that China's future character and actions will be shaped by the choices made to address demographic, economic, social, and other policy challenges. It also provides brief summaries of the issues and insights explored in the other chapters.

Xi Jinping justifies his relentless centralization of power in the party leadership as necessary to pursue a reform agenda he was mandated to fulfill and to galvanize a party grown lethargic, unresponsive to central direction, and corrupt. But Xi's concentration of power also debilitates the decentralization of decision-making authority and the incentives for risk and innovation that economic reform is intended to facilitate. Furthermore, it invites personalistic distortions of political behavior that undermine the stability of institutionalized politics that has served China well and for which Xi stridently espouses support. How far the political steps Xi has backed to implement his reform agenda go toward hindering its achievement will be a central part of the story of Xi's drive to realize the "China dream."

China has in recent years embarked on an ambitious array of industrial policy and infrastructure investment programs. The scope of these programs is far greater than anything China has undertaken in the past, and they represent a great gamble. While China possesses the resources in the short run to finance most of these programs, they must be managed well or the build-up of debt and the accumulation of failed projects will threaten growth. After a decade, slower growth and an aging society will present a new set of challenges, increasing the risks of this gamble.

Xi Jinping's anticorruption crackdown entered its sixth year at the same time that Xi began his second term as general secretary of the Communist Party of China. The crackdown has seen an unprecedented number of high-ranking party leaders, state officials, and military officers charged with corruption, including five members of the Politburo. Officially the crackdown has become the "new normal" and will continue indefinitely. Has Xi, however, succeeded in curbing corruption? What are the implications of a never-ending attack on corruption? Will the merger of the anticorruption agencies of the party's Central Discipline Inspection Commission, the state's Ministry of Supervision, and the judiciary's Procuratorate to form a new National Supervisory Commission significantly enhance the regime's ability to curb and control corruption? This chapter explores these questions and the implication of China's ongoing war on corruption for its political future.

Xi Jinping's anticorruption crackdown entered its sixth year at the same time that Xi began his second term as general secretary of the Communist Party of China. The crackdown has seen an unprecedented number of high-ranking party leaders, state officials, and military officers charged with corruption, including five members of the Politburo. Officially the crackdown has become the "new normal" and will continue indefinitely. Has Xi, however, succeeded in curbing corruption? What are the implications of a never-ending attack on corruption? Will the merger of the anticorruption agencies of the party's Central Discipline Inspection Commission, the state's Ministry of Supervision, and the judiciary's Procuratorate to form a new National Supervisory Commission significantly enhance the regime's ability to curb and control corruption? This chapter explores these questions and the implication of China's ongoing war on corruption for its political future.

This chapter traces the evolution of social media and assesses its impacts on the political process and social transformation as well as government response in China since the 1990s. The emergence of social media has provided new channels of social inputs into China's political dynamics and has greatly changed patterns of interactions between the state and society, reflecting increasingly diverse social forces and inducing new ways of governance in China.

This chapter focuses on demographic change and health system reform in China. The first section focuses on population aging, gender imbalance, and urbanization, and their implications for economic growth and social protection systems. The second section focuses on development of the health system, recent reforms, and ongoing challenges. The chapter argues that China's health-care system must be reengineered to emphasize prevention, provide health care for people with multiple chronic diseases, assure equitable access to medical technologies, and ensure long-term care without unsustainable increases in opportunity costs for future generations. Multiple government agencies will continue to oversee important aspects of healthy aging, and a lack of coordination may undermine best efforts in local experimentation with solutions. Moreover, health-care reform is not a one-off accomplishment but will periodically require larger incremental changes and will incessantly call for smaller adjustments due to rapidly changing technologies of treatment and necessity of adjustment to China's changing demographics.

This chapter examines the goals of the Chinese government to make urbanization more inclusive and equitable. It compares two modes of urbanization: workplace-based and citizenship-based. Workplace-based urbanization relies on formal employment as the main mechanism to incorporate rural citizens in urban social welfare and citizenship. It functions according to a meritocratic logic. Inclusion is linked to one's skills, education, and employment prospects. Citizenship-based urbanization targets local rural citizens for inclusion and applies a spatial logic: the ability to become an urban citizen is linked to one's location. Rural citizens on city outskirts are gradually incorporated as urban citizens, often in exchange for land requisition. There are three barriers in achieving inclusion through these modes of inclusion: the decentralized and fragmented nature of Chinese governance, the endemic conflict over land requisition, and the rise of the gig economy in eroding the traditional workplace.

Future economic growth in China will depend primarily on improvements to the stock of human capital because the potential for gains from more efficient use of human capital is limited. This chapter explores how investments in education could drive or constrain China's future. An economic growth rate of about 3 percent to 4 percent is a more realistic target for China in the coming decades. Achieving this growth rate will require substantial investments in China's human capital stock, especially in rural areas of the country. Providing additional funding for high school and college enrollment expansion is feasible and necessary. Under the optimistic scenario, the education expansion with quality improvement investment will incur an annual incremental cost of 1 percent of the current total government educational expenditure. Additional expenditures will be required to incentivize more students to enroll in and complete high school. Success will also require measures to address the other challenges.

This chapter argues that China's foreign policy derives from and is a key component of China's national strategy to manage external threats and achieve greater wealth, power, and influence. How it pursues those objectives is a function of domestic and developmental needs and contingencies in the international system. The demands and difficulties of managing the kinds of challenges examined will constrain Beijing's foreign policy options and compel it to maintain relatively good relations with the United States and to continue to work within the liberal world order.

Many assume that China's increasing economic presence in the Global South, from its Asia neighbors to countries in faraway developing regions, challenges American and Western domination. This chapter shows that China's export-oriented developmental miracle is in fact a constitutive part of the existing global economic order relying on US demands. At the same time, China's overseas economic interests, though indisputably mounting, are still relatively small if we discount capital flight in the outgoing flow of investment. The rise of China's capital export is still urging China to follow the footsteps of preceding capitalist-hegemonic powers to protect its global economic interests by projecting its political influence overseas. Having been a free rider in the US-centered global order for decades, mastering the skill of flexing its political and military muscle on the global stage independently is going to be a long and uncertain process for China.

This chapter examines the economic rationale and finances of the Belt and Road Initiative, a signature program in Xi Jinping's assertive foreign policy that aims to build multidimensional networks linking more than sixty countries and costing trillions of dollars. The BRI was conceived during the decade-long fiscal expansion that began at the turn of the century, and the question is whether it remains affordable under slower growth. At this stage in its development, China must manage the program prudently to avoid saddling banks with bad loans from failed projects. As ever, the decentralized system remains the Achilles' heel, reflected in the gap between official statements of expenditure and figures compiled from bank lending and program announcements. Recent fiscal reforms have strengthened the government's ability to rein in local governments but provide little protection against risks from an overly ambitious foreign policy agenda.

This chapter describes and analyzes Beijing's efforts to cooperate with seven Southeast Asian neighbors to build an integrated high- and conventional-speed railway system from southern China to Singapore by three potential lines. Progress has been impressive, but massive challenges remain to realize the vision. Among the challenges are political debates in China concerning financial and political risks and opportunity costs. No less challenging are the varied concerns and interests of the seven transit countries. Can/will Beijing learn from prior missteps? Will China be able to involve private capital and other nations in its efforts, thereby mitigating problems of an exclusively PRC, state-driven effort? Will Beijing show the political and foreign policy dexterity required to construct an integrated, multinational undertaking such as this? This chapter addresses these key questions.

China's economic growth, global engagement, and national aspirations enable and shape the military dimension of its national security strategy. This chapter assesses what is typical, predictable, and novel about China's military modernization program and defense planning. It discusses the elements that inform the military strategy and force development of "all" major powers and summarizes the development of the People's Liberation Army (PLA) since the founding of the PRC. With that as background, the chapter examines the PRC's current national and military strategy goals as well as the factors that will be most important in shaping how Beijing elects to achieve its objectives: namely, the level of strategic ambition and threat perceptions, resource allocation, and force development processes. The chapter concludes with a discussion of how China's dynamic external geopolitical environment will influence PLA strategy and modernization.

This chapter surveys the foundations for China's three decades of spectacular economic growth, showing the ways that it parallels and departs from the trajectories of other former state socialist economies and East Asian "miracle" economies. This rapid growth has had clear political dividends for the CCP—high rates of upward mobility, public optimism about the future, rising patriotism, elite unity, and generally high levels of trust in the party. As the high-growth era ends, forcing a shift in the successful growth model, with intensifying demographic headwinds, rapidly accumulating corporate debt, and the prospect of much lower growth rates, these dividends will inevitably evaporate. The CCP will become more severely strained by domestic fiscal liabilities. These changes will inevitably alter many of features of party rule until now taken for granted and will create new demands and tensions in the political system—especially among educated urbanites and party members, the primary beneficiaries of reform.