From Juggernaut to Crisis: Perception of China Shifts With Mood

When times were good, China's still heavily planned economy was a model to emulate. It was seen as turning into Singapore, a highly efficient market economy with greater individual liberty, but little in the way of political rights.

Now times are bad, and all manner of theories and criticisms are pouring out of the woodwork. The article below is a good example, and it takes a novel angle of looking at historic examples of rising powers with great central control.

Politico: China: The new Spanish Empire?
Since the dawn of capitalism, closed societies with repressive governments have — much like China — been capable of remarkable growth and innovation. Sixteenth-century Spain was a great imperial power, with a massive navy and extensive industry such as shipbuilding and mining. One could say the same thing about Louis XIV’s France during the 17th century, which also had vast wealth, burgeoning industry and a sprawling empire.

But both countries were also secretive, absolute monarchies, and they found themselves thrust into competition with the freer countries Holland and Great Britain. Holland, in particular, with a government that didn’t try to control information, became the information center of Europe — the place traders went to find out vital information which they then used as the basis of their projects and investments. The large empires, on the other hand, had economies so centrally planned that the monarch himself would often make detailed economic decisions. As these secretive monarchies tried to prop up their economies, they ended up in unsustainable positions that invariably led to bankruptcy, collapse and conflict.
It's interesting too see how many people have become suddenly bearish on China. In some cases, perhaps in the case of the author above, the person may have been bearish a long-time, but only now with a change in mood are their views accepted. In other cases, people are turning bearish all of a sudden and have little basis for their interpretations. Sentiment will turn extremely negative on China before the current crisis ends. If the yuan does tumble, there will be those saying China has failed. Watch the reforms though. As long as China continues to push ahead with reforms, it will emerge stronger on the other side of this turmoil.

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