Change of Plans
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Economic Policy

Change of Plans

Making Market Capitalism Safe for China

20195 min readMacroPolo

The conventional wisdom held that market reforms would eventually lead China toward political liberalization. Instead, China is adapting market capitalism to reinforce rather than challenge its political system.

The Original Thesis

Western engagement with China was premised partly on the belief that economic liberalization would lead to political reform. Markets, it was assumed, would create pressures for democratization.

China's Alternative Path

Instead, China has demonstrated that:

  • Market mechanisms can coexist with one-party rule
  • State capacity can be strengthened through selective marketization
  • Technology can enhance rather than undermine state control
  • Economic development can bolster regime legitimacy

Implications

China's model suggests that the relationship between economic and political liberalization is more complex than previously assumed.

Originally published by MacroPolo, Paulson Institute