Making the case that China’s success isn’t worthy of emulation, economist Damboso Moyo suggests the following:
China’s track record is unquestionably impressive. But the Chinese model isn’t as viable as its admirers in the emerging world often think. First, unlike many emerging markets, China’s growth has been driven largely by exports. Its success has been dependent on the free markets of the West. Most other emerging-market economies are based on agricultural commodities—just the sort of produce that the U.S. and Europe undercut with their own domestic subsidies.
Second, an economic system with the state at its heart is inefficient because it dislocates markets. When the government is the ultimate economic arbiter, assets are inevitably mispriced, which hinders sustained, longer-term growth. It also creates imbalances between supply and demand, which can spark inflation and distort interest rates.
Finally, policies that mimic China may yield a short-term burst in employment, but they also produce serious negative externalities and economic dead weight. China itself is now grappling with massive debt woes in its financial sector, a property bubble that could burst at any time and pollution that slows growth.