Large-scale privatization, of course, is not the only, or even the main, “solution” to the problems that Guo identifies, but if done correctly it can be part of the solution by undermining entrenched power and adding flexibility to the country’s governance structure. What is especially interesting, at least to me, is that an increasing number of commentators within China are identifying the social and economic rigidities imposed by the state system as crucially important in constraining China’s future economic and political growth.
This is becoming a pretty contentious debate. Over the past several months, in fact, we have seen a noticeable surge in articles and reports like this one – often by very prominent academics and policy advisors – criticizing the power of special interests in China. Their main concern seems to be over the constraints these special interests impose on further Chinese development, with the entrenched interests that have benefitted over the last decade or two having become so powerful that they are making it increasingly difficult for China to adjust.
A lot of very smart people in China, in other words, seem to be worried that the country’s governance structure and its development model are no longer able to accommodate the needs of the economy and that it is vitally important to confront the entrenched interest that make change difficult. This is sometimes presented in the foreign press as the debate between the “Chongqing” model versus the “Guangdong” model.
I apologize for the rather abstract and dry description in this and the three previous paragraphs of what is actually a gripping and very interesting topic, but for perhaps obvious reasons this is something about which I am reluctant to say too much. Still, anyone trying to predict China’s economic outlook for the next few years should be very aware of this fierce debate.
via www.mpettis.com
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