by Graham Summers
Gains Pains Capital
I’ve been skeptical about China for some time. While I do believe China has made some serious economic progress as a country, I remain thoroughly convinced that ultimately its economic “miracle” will be much like that of the Soviet Union powerhouse in the late 20s: apparently awesome in scope at the time, but a total fraud after the fact.
For one thing, China remains a control economy. There is no history that I know of in which a controlled economy works. The primary drivers of macro-economic growth are innovation, technological adaptation, and increased efficiency.
In order to have this, you need to have rule of law, strong education, openness to trade, and quality institutions to establish credibility and uphold the rule of law.