…As outsiders behold China’s transformation from peasant nation to economic colossus, the risks of extrapolating from China’s robust present into an indeterminate future are not to be ignored. China’s rise is doubtless an economic miracle. But like Japan’s, China’s state-driven economic model may prove more useful in earlier stages of development than in guaranteeing sustained growth well into the future.
“Japan had an economic model that worked phenomenally well for, what, 40 years? And then it stopped working,” Arthur Kroeber, the managing director of Dragonomics, a Beijing-based economic forecasting firm, said in an interview. “Does that prove the model for the first 40 years was wrong? No — it proves that it was right for that stage of Japan’s development.”
Many of the complaints that United States officials brought to this week’s Strategic and Economic Dialogue in Beijing — about markets closed to foreign competition; about unfairly appropriating hard-won American technologies; about rigged currency values that swell American trade deficits — may ring familiar to those who followed United States-Japan relations two decades ago.