Good article. I always thought it would be fascinating to see if the Chinese style of development could match what other East Asian nations (Singapore/Taiwan/etc) did with their 'State-led' development model.
China obviously had a much tougher start because of their history of totalitarian government and a communist society that was very much at odds with economic liberalism. With the other Asian Tigers, they had little to change since in 1950 most of them were backwater, rural states with little political history that would impede their development.
Perhaps we may be able to draw some parallels to the Soviet Union in the 1970s when growth there started to slow as the extrinsic development the USSR had relied on for decades began to show its lack of sustainability. China really needs to set up a system where the rule of law is firmly established, there is clarity and openness between government and business, and economic liberties are extended to all people. Perhaps the state needs to take a step back here, they did do a good job of transitioning away from the horrors of Marxism but I think its clear that the Chinese model can only go so far.
I would even hasten to argue that at this point China has enough intellectual capital to begin on a full repudiation of the communist system and adopt a Western style liberal democracy. Obviously the political maneuvering would be extremely difficult, but it remains a possibility. Ultimately as wages continue to rise, as the environmental conditions continue to deteriorate and as the service and consumer sectors grow, China is drifting further away, at least in the more developed regions, than the simple mass-producing, cheap labor, export economy it was based on for decades. Again, all things considered, they did a tremendous job of getting the country this far and took on the challenges posed by essentially kicking millions of government workers out of their SOEs but I do not know how much longer China can continue to masquerade as a communist state, retain an authoritarian government, and remain weak on the rule of law and make a healthy transition to a post-industrial economy in the coming decades.
