Chris over at the China Brief mentioned that The Coming Collapse of China as a market success but completely wrong in its predictions.
When I was in college, I was taught that to reform an economy you have to do it fast. We were taught that if you go slow, the beauracrats will organize, and you will fail. Russia tried that, and Crony capitalism emerged. China ignored that and has 33 years of tremendous growth to show for it.
China chose an easy to hard reform because they needed to get momementum. They have turned a whole country around in these thirty years by this method and they have overcome every challenge. They broke the iron rice bowl. They joined WTO to make themselves better while The Coming Collapse said it would break them. Gordon had no idea what China could do. It is amazing to me that people still listen to Gordon. China’s fabulous growth proved him overwhelmingly wrong, and now he says they were lucky the last 12 years.
China may not become the worlds number one, but it is still not going to collapse even 12 years after Gordon Chang wrote that book ” proving” the whole economic miracle was a mirage.
So we do not know how China will overcome the myriad pressures it now faces, but we did not know how they would succeed in any of a myriad of similar crises over the last 30 years, and they have met them all.
The naysayers on China could not have done what China did, but are ready to pick on China and write books like The Coming Collapse. Interestingly, America collapsed in 2008 while China grew 8% a year. Gordon just named his book wrong.
The next steps for China are not easy, but the past was no picnic. America can yet rise again, and China can also find a way.