Four political perspectives on China’s economic future

Abstract

PurposeTo chart the influence of politics on the future of China’s economy this article draws on the insights of four experts to delineate a range of possibilities.Design/methodology/approachTo better understand the factors at work the author considers the logic and research undergirding four experts’ different views of the unfolding interplay of China’s politics and its economy.FindingsThe four vies of China’s political and economic future: (1) A post-democratic future: Eric Li, a venture capitalist, is optimistic that today’s Chinese Communist Party can successfully meet the country’s challenges going forward. (2) China’s trapped transition: Minxin Pei, a professor of government at Claremont McKenna College, worries that political inertia may be coupled with an extended period of economic stagnation. (3) Reform, innovation and growth: Yasheng Huang, a professor of global ei8conomics and management at MIT with deep knowledge of China’s economy and Chinese business, is relatively optimistic, seeing political reform as a potential springboard for continued economic dynamism. (4) The coming Communist Party crackup: David Shambaugh, a professor of international affairs and director of the China policy program at George Washington University, suggests the increasing possibility of a coup and worries about the potential political and economic turmoil associated with such an action.Practical implicationsTo really take advantage of its R&D investments, China needs a stronger market-based economic system, a more open and democratic political system, and a rule-based legal system that offers strong intellectual property protection.Originality/valueThe diverse set of possibilities for China’s political and economic future provide executives with a guide for interpreting current events as they play out.