Project Syndicate: Rethinking the Next China

China has steadily shifted policies since 1980 in pursuit of global economic leadership. “While many of the key building blocks of China’s transitional framework have fallen into place – especially rapid growth in services and accelerated urbanization – there can be no mistaking a new and important twist: China now appears to be changing from an adapter to a driver of globalization,” explains Stephen Roach for Project Syndicate. Roach lists three implications: China’s leaders have determined that the nation cannot rely on consumer-driven growth as the Chinese people continue to assess uncertainty and engage in high rates of savings. “China has elected to draw on a new external source of growth to compensate for a shortfall of internal demand,” Roach notes. Excess domestic capacity and reliance on state-owned enterprises remain challenges on the production side. Finally, Roach warns, China’s shift toward increasingly centralized power, with controls on the internet, NGOs and markets, ironically runs counter toward traditional understanding and patterns of globalization. – YaleGlobal