A new World Bank report warns that China must drastically overhaul the way it does business — or risk financial catastrophe.With the U.S. still limping its way out of the Great Recession, and Europe mired in a seemingly endless debt crisis, China has emerged from the turmoil of recent years as the engine of the global economy. China's extraordinary rise — built on three straight decades of 10 percent annual growth — is the envy of emerging economies. And China blazed to the top in its own way, deploying a heavy-handed, state-driven model that shattered assumptions about the supremacy of free-market economics.
Yet in a new report, the World Bank warns that China must essentially overhaul its entire economic structure if it wants to avoid a "crisis" — and some leaders in China seem to agree. Here, a guide to China at the crossroads:
How did China get this far?
Largely by following the examples of Japan and South Korea, both of which relied on cheap labor to make cheap goods for export. At the same time, the countries industrialized rapidly by directing banks to make huge loans to government-connected conglomerates. Read More
