History will look back on 2012 as the year when China anointed its “fifth generation” of leaders and shifted to a slower growth trajectory, writes Yukon Huang. This transition will take place against a backdrop of daunting internal challenges – increasing social unrest, widening income disparities and both ecological and man-made disasters – and of escalating external tensions, stemming from America’s “pivot” to Asia and simmering regional worries about China’s economic rise.

While the political system will be fixated on preserving stability as new leaders take the helm, reduced economic flexibility could thwart Beijing’s intentions to do so.

In truth, slower growth of about 8 per cent could be better for China and for the world. More environmentally sustainable and equitable outcomes would ease popular concerns and higher consumption would ease tensions over global trade.