The South African Civil Society Information Service

The Chinese Model

20 May 2011

China's economic success has attracted much attention and curiosity about the drivers behind its steady growth. Orvell Schell, Director of the Centre on US-China Relations, describes the Chinese economy as a curious hybrid between certain highly “marketized” sections of the economy and state control.

There are big enterprises still owned and controlled by the government, but which operate more or less by market rules. Nevertheless, the state has a great deal more control ability.

According to Schell, the West viewed China’s centralized economy as rigid and out of date, but has come full circle after the economic meltdown, to look at China through a different lens. Namely by maintaining certain kinds of authoritarian control and by not letting market forces run so freely, the Chinese have actually come out in a much better condition than they went into the economic crisis, while the US and other more open markets have suffered.

China’s success has led to a paradox and shift in thinking about models of development in terms of what works and what doesn't work, says Schell. 

However, since China opened up its economy, one of the negative effects has been a weakened social welfare safety net. The old welfare system has vanished.

According to Schell, the Chinese leadership is extremely worried by the fracture lines that have developed between rich and poor as well as urban and rural Chinese.

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