China's growth continues to slow, but it is still high by international standards and contributes about a quarter of global growth. The growth model based on capital accumulation has led to misallocation of capital and excess capacity in a number of industries as well as falling investment effi ciency, dictating a slower pace for investment. The reining in of shadow banking, an important source of fi nancing for local infrastructure projects and for the private sector, weighs further on investment. Investment has been fi nanced by debt, fuelled by interest subsidies and implicit guarantees for state-owned enterprises and other public entities. Slower growth implies lower enterprise profi ts and lower ability to service their debt, which has been accumulated primarily by state-owned enterprises and has reached unsustainable levels. Slowing growth and swiftly enacted tax cuts also imply lower fi scal resources to make growth more inclusive. In the medium term, productivity gainsand more inclusive policies could sustain growth. Local protectionism increases transaction costs and hinders competition and restrictions on the hukou and the fragmented pension system limit labour mobility. The Economic Survey of China assesses the country's recent macroeconomic performance and proposes policy measures to promote higher-quality growth. Policy recommendations relate to how to integrate product and labour markets and enhance inclusiveness