By Bilal Hafeez 09-08-2019

The Real Reason for China’s Rise (Project Syndicate, 3 min read)


(You can read the article by clicking here)

Most outside observers assume that the Chinese growth engine is fuelled solely by an asset-endowed government pursuing policy that restricts freedom for the private sector. In this piece, Zhang Jun, Dean of the School of Economics at Fudan University, argues that over the past forty years American-style capitalism has found its way into the Chinese model, creating economic liberalization. This is most clearly evident in the tech sector, with giants like Alibaba, Tencent, and JD.com established as global leaders; even Huawei, which suffered direct attacks rose eleven places in the Fortune 500 last year.

Why does this matter? With the Chinese economy’s recent slowdown, Beijing needs to address the structural issues at play such as the rising cost of finance and declining return on capital. Most importantly, though, it needs to recognise what worked well: freeing up private entrepreneurship and fostering competition if the country hopes to maintain its accelerated growth amidst turbulent times.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)


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