Source: Paper presented at the POSRI International Forum on China's Development
This paper reviews China's current economy with an eye to its future prospects and the kinds of policies that can maximize the probability that China's growth by the middle of this century will leave it with a standard of living closer to that of Spain in the year 2000. The alternative is something more in the direction of a "sick man" or "chaos" scenario of weak growth, social and political unrest, and resulting international tensions, not to mention standard-of-living challenges for ordinary Chinese. The paper's approach is ad hoc, but the unifying theme is a skeptical view of any traditional market-oriented policy proposal that is not first tested against actual conditions in China's inherited environment of market failures and incomplete institutions. If Chinese policymakers continue to address the concerns highlighted in this paper and in some cases if they adjust their approach - especially in terms of rural grain policies - then prospects for continued high economic growth in China are quite good indeed.
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