China’s Economy: “A Free Market for Unfree People”?

Enodo Economics Chief Economist, Diana Choyleva with her thought of the day.

‘’A free market for unfree people’’

This is how one author describes the vision of the world that China is offering. Free market for unfree people is a vision where prosperity and individual freedom no longer need to be intertwined. A vision compelling for all authoritarian regimes. A vision finding fertile ground in Western educational institutions, especially among the young. But does this phrase describe accurately China’s offering, and is China’s vision realistic in bifurcated world of competing ideologies?

The answer to the first question is, no. China has allowed market forces to play a larger role in its economy, but it is not a free market economy. Land, labour, capital don’t move freely, and top-down party control is critical for all economic outcomes. Either way, whatever we call it, China’s system has delivered prosperity for its people. True, but how much of China’s supersonic growth was thanks to its integration to the free, liberal, democratic world?

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