China’s success since it began its transition to a market economy has been based on adaptable strategies and policies: as each set of problems are solved, new problemsarise, for which new policies and strategies must be devised. This process includes social innovation . China recognized that it could not simply transfer economic institutions that had worked in othercountries; at the least, what succeeded elsewhere had to be adapted to the unique problems confronting China.
Today, China is discussing a “new economic model.” Of course, the old economic modelhas been a resounding success, producing almost 10% annual growth for 30 years and lifting hundreds of millions of Chinese out of poverty. The changes are apparent not only in the statistics, but evenmore so in the faces of the people that one sees around the country.
I recently visited a remote Dong village in the mountains of Quizho, one of China’s poorest provinces, miles away from the nearestpaved road; yet it had electricity, and with electricity had come not just television, but the internet. While some rising incomes came from remittances from family members who had migrated tocoastal cities, the farmers, too, were better off, with new crops and better seeds: the government was selling, on credit, high-grade seeds with a guaranteed rate of germination.
China knows that it mustchange if it is to have sustainable growth. At every level, there is a consciousness of environmental limits and the realization that the resource-intensive consumption patterns now accepted in theUnited States would be a disaster for China – and for the world. As an increasing share of China’s population moves to cities, those cities will have to be made livable, which will require carefulplanning, including public transportation systems and parks.
Equally interesting, China is attempting to move away from the export-led growth strategy that it and other East Asian countries have...