China Deserves its Economic Success
In 1995, the late economist Gustav Ranis wrote that, “If there is one key to developmental success, it is avoiding the encrustation of ideas,” which is achieved through policymakers' “ever-increasing reliance on the responsiveness of large numbers of dispersed decision-makers.” That description suits China perfectly.
SHANGHAI – In the 1940s, the British historian Arnold J. Toynbee predicted that the United States and the Soviet Union would remain the world’s only two great powers. Not even China and India – with their “ancient civilizations” and “vast populations, territories, and resources” – would be able to “exert their latent strength” in the ensuing decades.
Toynbee was right about the ensuing decades, but wrong about two places: the Soviet Union collapsed, and now China has become the world’s second-largest economy and a leading global player. But, at a time of powerful economic headwinds and a new cold war with the US, will China continue its rise, or go the way of the Soviet Union?
To answer that question, it is first worth noting that China is not an enemy of the US, and the new Sino-American cold war is not rooted in a military standoff, much less ideological conflict. Rather, it reflects US President Donald Trump’s rejection of China’s economic rise and, more generally, of open policies.