The ‘Beijing Model’ Bubble
Westerners fall in love with the part of China’s economy that doesn’t work.
Mar 19, 2012, Vol. 17, No. 26 • By DAN BLUMENTHAL
Besides jawboning, there is not much the United States can do to encourage economic reform in China, but there is one thing we can try. We can endeavor to better understand and explain our own financial crisis. Our crisis was more one of crony capitalism than of free market capitalism. Crony capitalism has been on the march in the United States for over a decade. Indeed, some Americans advocate more crony capitalism of our own (see auto bailouts, Solyndra, Goldman Sachs, Fannie and Freddie) in order to “compete” with the Beijing Consensus. Nothing would do more harm to the free marketers in China. If Washington decides to compete with China on who can do crony capitalism better, we will lose. So too will China’s reformers.
Dan Blumenthal is a resident fellow at the American Enterprise Institute.