This emphasis on growth makes it less likely for China to develop into American complacency or decadence. There are other types of paralysis that it stands a good chance of avoiding. With its emphasis on the real economy, it is trying to avoid the fate of Hong Kong, where local elites have reorganized the productive forces completely around sustaining high property prices and managing mainland liquidity flows. With its emphasis on economic growth, it cannot be like Taiwan, whose single bright corporate beacon is surrounded by a mass of firms undergoing genteel decline. With its emphasis on manufacturing, it cannot be like the UK, which is so successful in the sounding-clever industries—television, journalism, finance, and universities—while seeing a falling share of R&D intensity and a global loss of standing among its largest firms.

2021 edition:

An important factor in China’s reform program includes not only a willingness to reshape the strategic landscape—like promoting manufacturing over the internet—but also a discernment of which foreign trends to resist. These include excessive globalization and financialization. Beijing diagnosed the problems with financialization earlier than the US, where the problem is now endemic. The leadership is targeting a high level of manufacturing output, rejecting the notion of comparative advantage. That static model constructed by economists with the aim of seducing undergrads has leaked out of the lecture hall and morphed into a political justification for only watching as American communities of engineering practice dissolved. And Beijing today looks prescient for having kept out the US social media companies that continuously infuriate their home government.

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