Challenges of Balancing Economic Growth with National Strategic Interest
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Challenges of Balancing Economic Growth with National Strategic Interest

Angel Guo 1*
1 Georgetown University
*Corresponding author: yg380@georgetown.edu
Published on 11 July 2025
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AEMPS Vol.202
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-80590-263-8
ISBN (Online): 978-1-80590-264-5
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Abstract

This paper explores the complex challenge China faces in balancing economic growth with national strategic interests, particularly in the context of managing Foreign Direct Investment (FDI) policies. Tracing the historical development of China's economic transformation, it examines key reforms such as the Household Responsibility System and the rise of Township and Village Enterprises (TVEs), which played crucial roles in transitioning from a command economy to a market-oriented system. The paper also delves into the privatization wave of the 1990s and the legitimization of the market economy under Deng Xiaoping's leadership. This paper discusses the policy paradox presented by the 2013 Third Plenum, which advocates for market forces in resource allocation while maintaining state dominance. Under Xi Jinping's strategic imperatives, China selectively liberalizes sectors to attract high-quality FDI while safeguarding national security. By discussing the challenges of creating a stable regulatory environment, fostering domestic innovation, and ensuring economic resilience, this paper emphasizes the need for a balanced approach to sustain economic growth and safeguard national interests.

Keywords:

Economic Growth, National Strategic Interests, Foreign Direct Investment, China's Economic Transformation

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Guo,A. (2025). Challenges of Balancing Economic Growth with National Strategic Interest. Advances in Economics, Management and Political Sciences,202,94-104.

References

[1]. Kroeber, Arthur R. “Industry, Exports, and Technology.” Essay. In China’s Economy: What Everyone Needs to Know, 2nd ed. Oxford University Press, 2020.

[2]. “GDP Growth (Annual%) - China, ” n.d. https: //data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2020& locations=CN& start=2020& view=map.

[3]. “Huawei.” Forbes. Forbes Magazine, October 12, 2021. https: //www.forbes.com/companies/huawei/?sh=7d25d32b5d26.

[4]. “Huawei Annual Report 2020.” Huawei, April 1, 2021. https: //www.huawei.com/en/annual-report/2020.

[5]. Buchholz, Katharina. Private Sector Is China's Main Economic Driver. June 29, 2021. Photograph. Statista. https: //www.statista.com/chart/25194/private-sector-contribution-to-economy-in-china/.

[6]. “Foreign Direct Investment, Net Inflows (BOP, Current US$) - China.” World Bank Open Data, n.d. https: //data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=CN.

[7]. Schoppa, R. Keith. “Death Dance: The Great Proletarian Cultural Revolution.” Essay. In Revolution and Its Past : Identities and Change in Modern Chinese History, 3rd ed., 346–64. New York, NY: Routledge, 2016.

[8]. DataBank | World Development Indicators.” The World Bank, n.d. https: //databank.worldbank.org/reports.aspx?source=2& series=NY.GDP.PCAP.KD.ZG& country=CHN#.

[9]. Schoppa, R. Keith. “Economics in Command: The End of Communism and the Flourishing of 'Market Socialism.’” Essay. In Revolution and Its Past: Identities and Change in Modern Chinese History, 3rd ed., 365–89. New York, NY: Routledge, 2016.

[10]. Naughton, Barry. “Rural Industrialization: From Township and Village Enterprises to Taobao Villages.” Essay. In The Chinese Economy: Adaptation and Growth, 2nd ed. Cambridge, MA: The MIT Press, 2017.

[11]. Oi, Jean, Chris Bebenek, and Debora L. Spar. “China: Building 'Capitalism with Socialist Characteristics.’” Harvard Business Publishing Education, 2011.

[12]. Huang, Yasheng. “The Entrepreneurial Decade.” Essay. In Capitalism with Chinese CharacteristicsL Entrepreneurship and the State, 50–108. New York, NY: Cambridge University Press, 2008.

[13]. 14th CPPCC National Committee.” Xinhuanet.com, n.d. https: //web.archive.org/web/20131104235848/http: //news.xinhuanet.com/newscenter/2005-01/16/content_2468098.htm.

[14]. “How’s the First TVE?” EZJSR, February 14, 2018. https: //biz.zjol.com.cn/zjjjbd/qyxw/201802/t20180214_6599730.shtml.

[15]. Gill, Bates. “Legitimacy: Prioritizing the Party and Its Rule.” Essay. In Daring to Struggle: China’s Global Ambitions under Xi Jinping, 49–77. Oxford University Press, 2022.

[16]. Fewsmith, Joseph. “Mao versus Local Forces: The Futian Rebellion.” Essay. In Forging Leninism in China: Mao and the Remaking of the Chinese Communist Party, 1927–1934, 101–39. Cambridge University Press, 2022.

[17]. Shirk, Susan L. “Strongman Rule.” Essay. In Overreach: How China Derailed Its Peaceful Rise, 178–206. Oxford University Press, 2023.

[18]. Fewsmith, Joseph. “Xi Jinping’s Centralization of Power.” Essay. In Rethinking Chinese Politics, 131–56. “The Nineteenth Party Congress and Reinvigorating Leninism.” Essay. In Rethinking Chinese Politics, 157–84. Cambridge University Press, 2021.

[19]. Douglas, Jason, and Weilun Soon. “Foreign Firms Pull Billions in Earnings Out of China.” The Wall Street Journal, November 6, 2023. https: //www.wsj.com/world/china/foreign-firms-pull-billions-in-earnings-out-of-china-0423b68a

References

[1]. Kroeber, Arthur R. “Industry, Exports, and Technology.” Essay. In China’s Economy: What Everyone Needs to Know, 2nd ed. Oxford University Press, 2020.

[2]. “GDP Growth (Annual%) - China, ” n.d. https: //data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2020& locations=CN& start=2020& view=map.

[3]. “Huawei.” Forbes. Forbes Magazine, October 12, 2021. https: //www.forbes.com/companies/huawei/?sh=7d25d32b5d26.

[4]. “Huawei Annual Report 2020.” Huawei, April 1, 2021. https: //www.huawei.com/en/annual-report/2020.

[5]. Buchholz, Katharina. Private Sector Is China's Main Economic Driver. June 29, 2021. Photograph. Statista. https: //www.statista.com/chart/25194/private-sector-contribution-to-economy-in-china/.

[6]. “Foreign Direct Investment, Net Inflows (BOP, Current US$) - China.” World Bank Open Data, n.d. https: //data.worldbank.org/indicator/BX.KLT.DINV.CD.WD?locations=CN.

[7]. Schoppa, R. Keith. “Death Dance: The Great Proletarian Cultural Revolution.” Essay. In Revolution and Its Past : Identities and Change in Modern Chinese History, 3rd ed., 346–64. New York, NY: Routledge, 2016.

[8]. DataBank | World Development Indicators.” The World Bank, n.d. https: //databank.worldbank.org/reports.aspx?source=2& series=NY.GDP.PCAP.KD.ZG& country=CHN#.

[9]. Schoppa, R. Keith. “Economics in Command: The End of Communism and the Flourishing of 'Market Socialism.’” Essay. In Revolution and Its Past: Identities and Change in Modern Chinese History, 3rd ed., 365–89. New York, NY: Routledge, 2016.

[10]. Naughton, Barry. “Rural Industrialization: From Township and Village Enterprises to Taobao Villages.” Essay. In The Chinese Economy: Adaptation and Growth, 2nd ed. Cambridge, MA: The MIT Press, 2017.

[11]. Oi, Jean, Chris Bebenek, and Debora L. Spar. “China: Building 'Capitalism with Socialist Characteristics.’” Harvard Business Publishing Education, 2011.

[12]. Huang, Yasheng. “The Entrepreneurial Decade.” Essay. In Capitalism with Chinese CharacteristicsL Entrepreneurship and the State, 50–108. New York, NY: Cambridge University Press, 2008.

[13]. 14th CPPCC National Committee.” Xinhuanet.com, n.d. https: //web.archive.org/web/20131104235848/http: //news.xinhuanet.com/newscenter/2005-01/16/content_2468098.htm.

[14]. “How’s the First TVE?” EZJSR, February 14, 2018. https: //biz.zjol.com.cn/zjjjbd/qyxw/201802/t20180214_6599730.shtml.

[15]. Gill, Bates. “Legitimacy: Prioritizing the Party and Its Rule.” Essay. In Daring to Struggle: China’s Global Ambitions under Xi Jinping, 49–77. Oxford University Press, 2022.

[16]. Fewsmith, Joseph. “Mao versus Local Forces: The Futian Rebellion.” Essay. In Forging Leninism in China: Mao and the Remaking of the Chinese Communist Party, 1927–1934, 101–39. Cambridge University Press, 2022.

[17]. Shirk, Susan L. “Strongman Rule.” Essay. In Overreach: How China Derailed Its Peaceful Rise, 178–206. Oxford University Press, 2023.

[18]. Fewsmith, Joseph. “Xi Jinping’s Centralization of Power.” Essay. In Rethinking Chinese Politics, 131–56. “The Nineteenth Party Congress and Reinvigorating Leninism.” Essay. In Rethinking Chinese Politics, 157–84. Cambridge University Press, 2021.

[19]. Douglas, Jason, and Weilun Soon. “Foreign Firms Pull Billions in Earnings Out of China.” The Wall Street Journal, November 6, 2023. https: //www.wsj.com/world/china/foreign-firms-pull-billions-in-earnings-out-of-china-0423b68a

Cite this article

Guo,A. (2025). Challenges of Balancing Economic Growth with National Strategic Interest. Advances in Economics, Management and Political Sciences,202,94-104.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of the 3rd International Conference on Financial Technology and Business Analysis

ISBN: 978-1-80590-263-8(Print) / 978-1-80590-264-5(Online)
Editor: Ursula Faura-Martínez
Conference website: https://2024.icftba.org/
Conference date: 13 June 2025
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.202
ISSN: 2754-1169(Print) / 2754-1177(Online)

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