Why China’s Economy Will Be So Hard to Fix

China’s economy grew an average 10 percent for 30 years, lifting 500 million people out of poverty. With those heady rates now in the past, its leaders are ditching the old investment and export growth model in favor of markets, consumers and services. Here's how the transition is playing out.

Some regions are suffering the effects of the slowdown more than others

Explore map to see China's diverse economy

China is struggling to meet its growth targets

While growth remains impressive by global standards, it hasn't lived up to government targets in recent years. Leaders want a cleaner, greener expansion with slower debt growth and have put a brake on past excesses that fueled corruption, waste and pollution.

Its economy is shifting to services

Cheap labor, vast factories and a building spree without parallel powered China’s economic miracle. Times are changing. Services today make up more than half of the nation’s economy as baristas, barbers and baby sitters become the new growth drivers.

The embrace of markets is proving rocky

Leaders have pledged to give market forces a greater role in the communist nation. It hasn’t been a smooth ride. The stock market burst in mid-2015, wiping out $5 trillion in value, and the yuan has lost its one-way appreciation status.

China risks growing old before it gets rich

As China’s population becomes richer and more urban, it's also getting older. Will economic dynamism fade as it did in Japan, or can retirees spending their savings help drive consumption and sustain economic rebalancing?

Population in rural and urban areas by age group

Money is flowing out as the yuan weakens

Years of strong economic growth lured global investment, while surging exports generated huge surpluses. The result: the world’s biggest foreign currency hoard. Now, as the yuan weakens, the central bank is reaching for its wallet to steady the currency and offset capital outflows.

As China grapples with its transition, the stakes are high. Policy errors or a deep slowdown could see it fall into the middle-income trap that has caught so many other developing nations after eras of robust growth. If China’s leaders pull it off, the country will continue its march to become the world's largest economy.