China has just decided to hold onto an economic, political, and social model that has a proven record of producing high economic growth – a model that never fails to tip over. I have witnessed the collapse of this kind of regime in Korea, the Philippines, and Indonesia. The leadership in each case held on past the model’s sell-by date.
The features of this model are startlingly consistent wherever you find it. Export-led production produces high growth rates, but it also leads to radical income inequality. There is urban drift—rural villagers flocking to cities—causing numerous social problems. There is little place for democracy because production must be maintained without a blip, and the leadership cannot afford to let wage-earners, who enjoy only minimally the benefits of what they produce, express themselves.
You do not have to look far. That is China today, just as it was Korea under the military dictators and Indonesia under Suharto. Since Deng Xiaoping launched China’s reform period in 1980, it has only been a matter of time before China came to its day of reckoning. As even the new leadership appears to understand, that day is now near at hand.
Read Full Article »
