China's continuing rise has put virtually every Western power on alert. But it would be a big mistake to see Chinese State Capitalism as inevitable. Beneath the surface, tensions are rising in Asia.
Eric Hobsbawm recently declared that the future of the world economy is that of “State Capitalism,” on the model promoted by China, where some 50 percent of the non-agricultural GDP is managed by state-owned enterprises. Somehow, we are assisting in the rise of a new dominant ideology. The success of economic and political concepts does not depend on the outcome of academic debates, but relies on the success of the powers that back it. The US is still the supreme power, but its declining dominance brings along an ideological decline. China’s story is the exact opposite.
But is this really the “big one,” a moment in history when we witness a great ideological switch from the West to Asia? Shall we believe in the fears of “The Economist”, which published a “special report” in January on The Rise of State Capitalism? The biggest concern is whether China would ever be able to withstand an economic crisis. But what analysts have termed a “downturn” for Asia’s giant is actually a monstrous economic growth of 7.5 percent, unseen in the US (almost) since 1984.
China’s problems are not merely economic