China’s Self-Serving Illusion

A 21st Century Myth: Authoritarian Modernization in Russia and China
Lo Bobo and Lilia Shevtsova

Carnegie Moscow Center – Carnegie Endowment for International Peace
July 2012

In this short yet thought-provoking work, Carnegie researchers Lo Bobo and Lilia Shevtsova offer what is certain to become a controversial point-of-view, and then likely a growing meme: despite apparent success in the wake of the global financial crisis, the promise of state capitalism is a self-serving illusion.

On China in particular, the authors suggest that the “Beijing consensus” has created success under exceptional circumstances. Far from being an economic model that other countries can emulate, China’s authoritarian modernization is quite likely unsustainable in China itself.

Rather than succumb to gloom and doom, the pair point a way forward. China’s economic success is actually based on economic liberalization, bottom-up reform, and central government improvisation. My reading of Huang Yasheng‘s brilliant (albeit overlong) Capitalism with Chinese Characteristics suggests that Lo and Shevtsova’s argument has merit.

The book argues gently, but the subtext is clear: the recommendations made by the World Bank in their China 2030 report are probably too mild: more must be done to save the Chinese economy from stewing in the juices of economic stagnation, 7% growth notwithstanding.

The authors also make a pointed case to the west: we should not kid ourselves that the biggest threat to Western economic liberalism is authoritarian capitalism. Rather, it is our hesitation to address and repair the fundamental problems that have led to the current crisis.

An excellent read.

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