Since opening up to foreign trade and investment and implementing free market reform in 1979, China has become one of the world’s fastest-growing economies, with real annual gross domestic products growth averaging nearly 10% through 2013. In recent years, China has emerged as a major global economic and trade power and its predicted to become the world’s largest economy. The global economy crisis tha  began in 2008 greatly affected China’s economy, GDP growth downturned and millions of Chinese workers lost their jobs. Economic model that worked so well during the early years of China’s development now needs to be changed. It’s one of the main challenges for the new Chinese leaders. China’s once-in-decade transition to a new generation of leaders took place at the 18th Party Congress in November 2012. At the 18th Party Congress the fifth generation of leaders came to power.
In this article Author argues that China faces daunting challenges and China is on the “crossroads”. The main goal of the article is to identify key challenges that China faces today. Author argues that China has far bigger challenges that slowing economy. Those challenges are: inequality, environment, rising expectations, demographics, corruption and others. Under the new leadership of president Xi Jinping, a quiet process of reform is under way in China. If successful, it will transform the country’s politics and the way its approaches the world. China’s political, economic and foreign policy over the next decades is not only fundamental to the country but also to the wider Asia-Pacifi c region and, increasingly, the world beyond.