Marshall’s talk will cover the following points:
- The “Beijing Consensus” or “China Model” of growth is in disarray. Domestic politics, now fractious, will determine China’s economic policies. Contrary to stereotypes, Xi Jinping’s authority is challenged from the left or right almost daily.
- Like the former Soviet Union, China faces a crisis of excessive capital formation (and debt funding excess capacity). Unlike the FSU, however, China has exported its excess capacity to the rest of the world. Hence, the choices made by China will have profound consequences globally.
- There is very little we can do to influence China’s choices since they will be driven by domestic politics. At best we can try to anticipate and cushion their consequences. Optimally we would invest more in education and infrastructure to outcompete China, but neither is likely given the current tenor of US politics.
Marshall W. Meyer is Tsai Wan-Tsai Professor Emeritus of Management and Sociology at the Wharton School of the University of Pennsylvania and Adjunct Professor at the School of Business of the Hong Kong University of Science and Technology. He has observed China close-up since 1999 and last fall keynoted a conference on “New Directions for the Chinese Economy” sponsored by Xinhua, the state news agency.