Must-Read: Stephen Roach: China’s Complexity Problem: “There are many moving parts in China’s daunting transition… what its leaders call a moderately well-off society…. Is China’s leadership up to the task?… The far bigger story is its economy’s solid progress on the road to rebalancing…. Services activity grew 8.4% year on year in the first half of 2015, far outstripping the 6.1% growth in manufacturing and construction…. China’s employment trends have held up much better than might be expected in the face of an economic slowdown…. Services are also the ingredient that makes China’s urbanization strategy so effective. Today, approximately 55% of China’s population lives in cities, compared to less than 20% in 1978….

While progress on economic rebalancing is encouraging, China has put far more on its plate: simultaneous plans to modernize the financial system, reform the currency, and address excesses in equity, debt, and property markets… [plus] an aggressive anti-corruption campaign, a more muscular foreign policy, and a nationalistic revival couched in terms of the “China Dream.”… China could inadvertently find itself mired in something comparable to what Minxin Pei has long called a “trapped transition,” in which the economic-reform strategy is stymied by the lack of political will in a one-party state…. As warnings about the “middle-income trap” underscore, history is littered with more failures than successes in pushing beyond the per capita income threshold that China has attained. The last thing China needs is to try to balance too much on the head of a pin. Its leaders need to simplify and clarify an agenda that risks becoming too complex to manage.