Zakaria: 2014 Is a Make or Break Year for China

Corruption. Pollution. Debt. Will Beijing's leaders tackle the challenges before the bubble bursts?

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China Daily / Reuters

Chinese Commerce Minister Gao Hucheng attends a news conference at the Chinese Ministry of Commerce in Beijing, June 21, 2013.

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Any such changes are bound to face political resistance and backlash from within the Communist Party and from some powerful sectors of society. President Xi Jinping has launched an anticorruption campaign, though many in China believe enforcement has been selective. He has also sought to stabilize the party's power by tightening the noose on any critics in the media and universities and even those who are private businesspeople. Xi has created a national security council focused largely on internal security, a sign of not only where his priorities lie but also where he sees his greatest challenges.

I'm not ready to bet against China. Its leadership has shown itself to be capable of difficult decisions and smart execution. Xi has accumulated an unusual degree of authority and clearly intends to use it to go down in history as the man who reformed China's system to make the country stronger and more powerful.

If China's leaders manage this transition well, the country will emerge stronger and more stable and become the largest economy in the world. If they don't, China will likely face a slump, one that will look a lot like those of other high-flying developing countries--such as South Korea and Taiwan--that ended a period of rapid growth and settled into a more normal trajectory. In many of those cases, slow growth coincided with widespread protests and the opening up of the political system.

Keeping China's growth model going will prove hard enough. But to do that with all the associated political challenges will test even China's extraordinary leaders.

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