7 - Has the Baton Passed to China?

Summary

Their powerful dynasties may have passed into history, but both Europe and China face issues that can be traced to their structural past. European nations still seek a functional integration of their economic and social systems while demanding an equal role in determining aggregate change. And even as modern China embarks on a massive campaign of overseas expansion for resources, its governance structure may contain the same weaknesses that felled dynasties – multitudinous layers and siloes of bureaucracy under central control, with admission to the privileged ranks of the party’s elite determined via rigorous examination and proof of loyalty, and susceptible to corruption. This chapter looks at the history of China’s economic transition, and asks if it is incomplete, faltering, or transitioning into a market economy that is distinctive from the West’s, even as it shares some fundamental properties. The Chinese approach to transition has left its economy with a structural impediment: it has not transitioned into a society in which a rule-of-law environment forms the backbone of mutual trust.