Opportunities and Challenges Ahead of China's “New Normal”

After three-and-a-half decades of breakneck growth, the Chinese economy has finally slowed down to just below 7 percent in the third quarter of 2015. Chinese President Xi Jinping has coined the term “new normal” to refer to this new situation. This commentary will examine the opportunities and challenges that lie ahead of China's “new normal” and their implications for foreign multinational firms investing in China. Some opportunities include regional economic integration; sizeable foreign reserves to finance development at home and abroad; and upgrading in the science and technology skills of its people. However, there are also challenges. These are: aging of China's population; institutional weakness, corruption/weak corporate governance and growing income inequality; and China's newfound confidence on the world stage.