In China, top-down control coexists with – and even allows for – local-level autonomy and bottom-up innovation. It is this “double-helix” phenomenon that confuses some observers, leading to radically contrasting analyses of the economy’s prospects.
SHANGHAI – Rarely do assessments of an economy’s performance and potential diverge as sharply as they do when it comes to China. Even as some economists laud China’s past achievements and future prospects, others fixate on presumed flaws in its development model and suggest that the middle-income trap awaits. But even more remarkable than the sharp divergence of opinions on China’s economy is the fact that both sides are able to marshal ample evidence to support their views.
Few would dispute that China owes its past economic success largely to technological imitation, enabled and encouraged by trade with – and direct investment from – developed economies, especially during the 1990s and in the first decade of this century. But one cannot pretend that translating technological imitation into rapid economic growth is not an achievement. After all, most low-income countries have not been able to do it.
In this discussion, pointing out that China still lacks a few key technologies, or that it obtained most of the technologies it has thanks to the allure of its huge market, is nitpicking. The true measure of technological success is the ability to convert new technologies into profits, growth, and engines of development. And China has done that not only by using Western technologies in their original form, but also by rapidly upgrading and adapting them.
SHANGHAI – Rarely do assessments of an economy’s performance and potential diverge as sharply as they do when it comes to China. Even as some economists laud China’s past achievements and future prospects, others fixate on presumed flaws in its development model and suggest that the middle-income trap awaits. But even more remarkable than the sharp divergence of opinions on China’s economy is the fact that both sides are able to marshal ample evidence to support their views.
Few would dispute that China owes its past economic success largely to technological imitation, enabled and encouraged by trade with – and direct investment from – developed economies, especially during the 1990s and in the first decade of this century. But one cannot pretend that translating technological imitation into rapid economic growth is not an achievement. After all, most low-income countries have not been able to do it.
In this discussion, pointing out that China still lacks a few key technologies, or that it obtained most of the technologies it has thanks to the allure of its huge market, is nitpicking. The true measure of technological success is the ability to convert new technologies into profits, growth, and engines of development. And China has done that not only by using Western technologies in their original form, but also by rapidly upgrading and adapting them.