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The End of the Chinese Miracle?
- Abstract
In his recent book, The Age of Turbulence, Alan Greenspan identifies the only nation that, in his view, can challenge the United States for world economic leadership a quarter-century from now. That country is China. Yet by each of the criteria that Greenspan himself considers crucial to economic success—property rights, representative governance, and the rule of law, to name the most important—China scores poorly or worse. Thus, the question raised inadvertently by Greenspan’s book is whether China’s effort to overtake the dominant position of the United States in the world economy can continue to coexist with the country’s overall political framework.
So far, China’s performance alone would seem to vindicate Greenspan’s prediction. Since Deng Xiao-ping’s ascension to power in 1978 and the beginning of the period of economic reform, the Chinese gross domestic product (GDP) has grown at an average annual rate of 9.8 percent according to official statistics. What is more, the rate of growth seems to be accelerating. Official indications are that GDP jumped by 10.2 percent in 2005, by 11.1 percent in 2006, and by 11.4 percent in 2007.
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