SHANGHAI ¨C China¡¯s economic growth is expected to have slowed to just over 6 percent this past year and it is unlikely to accelerate anytime soon. In fact, economic commentators generally agree that China¡¯s economic performance in 2019 ¡ª the worst in nearly 30 years ¡ª could be the best for at least a decade. What observers can¡¯t seem to agree on is how worried China should be, or what policymakers can do to improve growth prospects.

Optimists point out that, given the size of China¡¯s economy today, even 6 percent annual GDP growth translates into larger gains than double-digit growth 25 years ago. That may be true, pessimists note, but slowing GDP growth is hampering per capita income growth ¡ª bad news for a country at risk of becoming mired in the middle-income trap ¡ª and compounding the fiscal risks stemming from high corporate and local-government debt.

Whichever side of the fence one falls on, one thing is indisputable: policy inconsistencies and governance errors have contributed significantly to China¡¯s economic slowdown. The problem lies in the slow pace of progress on structural reforms. Long-term growth depends on decentralization of government authority, increased marketization and greater economic liberalization, with the private sector gaining far more access to finance and other factors of production.