China's Surprising Economic Evolution
In the late 1990s, Chinese Premier Zhu Rongji orchestrated a series of economic reforms that paved the way for China's accession into the World Trade Organization (WTO). It was a remarkable milestone: One of the world's last Communist states joined an institution synonymous with the U.S.-led world economic order.
Two decades later, China remains a member of the WTO. But as Xi Jinping solidifies his status as China's most prominent leader in decades, the country has evolved away from the Western-style economy it seemed poised to become.
"Zhu imagined a future China with a much smaller role for state enterprises and the Communist Party in guiding and deciding which outcomes would occur in industry after industry, than what we've seen with Xi Jinping," said Daniel Rosen, founding partner of the Rhodium Group and an expert in China's economy, at Asia Society on Thursday.
Since launching market reforms in 1978, China has embarked on a grand experiment to marry a Communist political system with a capitalist economy. Many observers, buoyed by Zhu's pursuit of WTO membership, predicted that the arrangement would ultimately result in China's democratization. Instead, China's political system is as authoritarian as ever — and now its economy has also become more statist.
"For the first time, many on the Chinese side have started saying that China's economic model is different from the Western model," said Rosen. "And that has challenged liberals in the United States and Europe who said that [China] was converging."
Rosen appeared in conversation with Asia Society Policy Institute Vice President Wendy Cutler. Watch the complete video here:
