After more than three decades of average annual growth close to 10 percent, China's economy is transitioning to a 'new normal' of slower but more balanced and sustainable growth. Its old drivers of growth -- a growing labor force, the migration from rural areas to cities, high levels of investments, and expanding exports -- are waning or having less impact. China's policymakers are well aware that the country needs new drivers of growth. This report proposes a reform agenda that emphasizes productivity and innovation to help policymakers promote China's future growth and achieve their vision of a modern and innovative China. The reform agenda is based on the three D's: removing Distortions to strengthen market competition and enhance the efficient allocation of resources in the economy; accelerating Diffusion of advanced technologies and management practices in China's economy, taking advantage of the large remaining potential for catch-up growth; and fostering Discovery and nurturing China's competitive and innovative capacity as China approaches OECD incomes in the decades ahead and extends the global innovation and technology frontier.

It is a pleasant task to welcome the appearance of the American edition of Professor Willy Kraus' valuable work on the economic and social development of the People's Republic of China, first published in German in 1979. The book has been updated in the light of the events that have occurred since the original publication and incorporates the latest statistical information made available by the Chinese authorities with unaccus tomed liberality. The American edition, like its German predecessor, is a monumental achievement of scholarship, attractively presented. In its comprehensiveness, insight, professionalism and wisdom it ranks among the best studies of the subject. It will add to the knowledge of the specialist, and help the interested layman find his way through the complexities of contemporary China's socioeconomic system. Professor Kraus' work is a most timely and welcome addition to a better and more thorough understanding of an absorbing and important subject. June 1982 Jan S. Prybyla Professor of Economics The Pennsylvania State University University Park, Pennsylvania Preface This book deals with China's development policies. It is based on the original German edition (1979), "Wirtschaftliche Entwicklung und sozialer Wandel in der Volksrepublik China," but is not merely a translation of the German original. The rapid changes in Chinese policy within the last two years, together with a sudden deluge of official data on economic and social developments in the People's Republic of China, have called for a basic and comprehensive revision of text and statistics.

In the last 30 years, China’s record economic growth lifted half a billion people out of poverty, with rapid urbanization providing abundant labor, cheap land, and good infrastructure. While China has avoided some of the common ills of urbanization, strains are showing as inefficient land development leads to urban sprawl and ghost towns, pollution threatens people’s health, and farmland and water resources are becoming scarce. With China’s urban population projected to rise to about one billion – or close to 70 percent of the country’s population – by 2030, China’s leaders are seeking a more coordinated urbanization process. Urban China is a joint research report by a team from the World Bank and the Development Research Center of China’s State Council which was established to address the challenges and opportunities of urbanization in China and to help China forge a new model of urbanization. The report takes as its point of departure the conviction that China's urbanization can become more efficient, inclusive, and sustainable. However, it stresses that achieving this vision will require strong support from both government and the markets for policy reforms in a number of area. The report proposes six main areas for reform: first, amending land management institutions to foster more efficient land use, denser cities, modernized agriculture, and more equitable wealth distribution; second, adjusting the hukou household registration system to increase labor mobility and provide urban migrant workers equal access to a common standard of public services; third, placing urban finances on a more sustainable footing while fostering financial discipline among local governments; fourth, improving urban planning to enhance connectivity and encourage scale and agglomeration economies; fifth, reducing environmental pressures through more efficient resource management; and sixth, improving governance at the local level.