Socialism with Chinese characteristics–i.e., capitalism
Sometime in the late Seventies, the Politburo of the People’s Republic of China, led by Deng Xiaoping, decided that central planning had to be abandoned as the tool shaping the economic progress of their country. Deng concluded that it should be replaced by the Asian Economic Development Model. Why?
The Politburo felt it had no other economic choice. Despite the negative effects of the Great Leap Forward and the subsequent Cultural Revolution, China had become too big and complex for central planning to be effective (if it ever was, even in a small and simple economy). The Politburo also saw the gradual deterioration of the Soviet Union and didn’t want to follow in its footsteps. In contrast, the examples of Japan, Korea, Singapore and Hong Kong all showed that the Development Model worked. Continue reading