Knowing what we don’t know: the Chinese economy


One thing that strikes me about us serious China observers is that we are frequently and completely wrong about the direction China is headed. In the 1980s many top analysts predicted that without democracy China would be unable to grow its economy. Later, many asserted that only with a free and open Internet could China maintain its growth.

Wrong on both accounts.

The Chinese development model has now become the first serious competitor to the Washington Consensus since the Cold War. More and more developing countries model their growth strategies on the Chinese state-managed market economy. 

We must continue to be vigilant with both our investigations and critiques of the Chinese system. However, it seems unwise to view it as an immature or inherently flawed system that will inevitably evolve to look more and more like the US model. And its success is emboldened by its growing popularity.

As it has in the past, failing to accept this will continue to produce misguided policies toward China.

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