1. Bruce Dickson Professor of Political Science and International Affairs George Washington University Updating the China Model

2. Creating national champions Emerging middle class Improved governance Global outreach and backlash

3. Creating National Champions Made in China Export Strategy without Chinese Brands

4. Creating National Champions Made in China Export Strategy without Chinese Brands LenovoHaier

5. Creating National Champions Government policies Favor state-owned enterprises (SOEs) Limit entry into Chinese market New innovation policy Challenges

6. Creating National Champions Implications for US Business environment in China Government focus on exchange rate and trade balance

7. Emerging Middle Class Recent trend: Less export driven, more domestic consumption Less based on cheap labor, more on skilled labor and urban middle class Motives Inequality Balanced growth Next phase of economic development

8. Emerging Middle Class Government policies Populism Urbanization

9. Emerging Middle Class Government policies Populism Urbanization Encourage rising wages Strike at Honda plant

10. Emerging Middle Class Government policies Populism Urbanization Encourage rising wages Suicide Nets

11. Emerging Middle Class Government policies Populism Urbanization Encourage rising wages Suicide Nets Happy Foxconn worker

12. Emerging Middle Class Government policies Populism Urbanization Encourage rising wages Subsidizing consumer goods

13. Emerging Middle Class Challenges Beneficiaries of export orientation Rising aspirations Implications for US Support for status quo Rising nationalism

14. Improved Governance Political reforms

15. Improved Governance Political reforms But not democratization Village election

16. Improved Governance Old strategy: hasten economic development Roads, railroads Telecommunications Education New Strategy: consequences of growth and reform Health care Pensions Environment Welfare

17. Improved Governance Challenges Consultation without accountability Rising demands

18. Improved Governance Challenges Consultation without accountability Rising demands Implications for US Democracy promotion But most Chinese are satisfied with status quo

19. Global Outreach and Backlash Security Resources Counter US influence

20. Global Outreach and Backlash Aid without linkage But still strings attached

21. Global Outreach and Backlash Aid without linkage But still strings attached

22. Global Outreach and Backlash Challenges International image Fears of dependence

23. Global Outreach and Backlash Challenges International image Fears of dependence Popular backlash Peru Kyrgyzstan

24. Global Outreach and Backlash Implications for US Defense against rising China Improved relations with a variety of countries Backlash may lessen Chinas appeal as international leader

25. Summary These four goals address Chinas basic goals Challenges and opportunities for China For US and other countries