NBR Analysis vol. 3, no. 3
The Future of China
Nicholas Lardy documents the enormous strides the Chinese economy has taken in recent years. He then examines important factors that will influence the course of Chinese economic development and trade for the remainder of the 1990s, and concludes that growth is very likely to continue at a rapid pace. It is no longer far-fetched to imagine that by the end of the decade China will achieve a level of foreign trade similar to Japan’s. Moreover, Professor Lardy sees China becoming increasingly dependent on the U.S. market and less dependent on intra-Asian trade, a trend that contrasts sharply with the current experiences of Japan and the other developing nations of Asia.
Kenneth Lieberthal gives an insightful overview of the political, economic, and international issues that will shape China through the turn of the century and beyond. He looks at such factors as leadership succession, changes required in the political system, uneven economic growth within China, absorption of Hong Kong and Macao, demographic changes, and environmental and resource constraints. He concludes, like Professor Lardy, that China’s economy will be increasingly integrated into the world economy. China will also experience severe political and social pressures, and can be expected to have a significant global impact on the proliferation of nuclear and military technologies and on environmental degradation.
David Bachman offers a provocative thesis by arguing that the Chinese political system is far more institutionalized than is typically believed. One result is that leadership choice is sharply constrained. He profiles the pool of candidates from which the next generation of leaders will be chosen, examines the way these successors are likely to interact, and assesses the kinds of issues they will have to tackle. He suggests that the political system is, and will remain, fragmented and weak while the market-driven sector of the economy will strengthen. As he puts it, “The party may rule, but the economy will govern.”