China's Biggest Economic Challenge

The best way to describe China's economic quandary is also the simplest: It can strive for maximum growth now or later -- but not both.

China's government is well aware that promoting the growth of the world's largest economy in the long term involves structural changes that will slow the economy in the short term. And its success in striking a balance has surprised many analysts. In several areas it has pressed ahead with ambitious reforms while letting growth moderate to a gentler pace (by Chinese standards) of less than 7 percent a year.