Why Shambaugh is wrong again on China’s future

By Ai Jun Source:Global Times Published: 2017/2/22 23:38:39

David Shambaugh, professor of international affairs and director of the China Policy Program at George Washington University, recently put forward another of his predictions about China during a lecture called, "Assessing China's Future," at Nanyang Technological University's S. Rajaratnam School of International Studies. According to reports, Shambaugh said that since 1960, only 13 out of 101 nations have successfully transitioned from being a middle income country to a developed economy, all of which are democracies. That being said, China, if it continues its political path of "hard authoritarianism," will not hurdle the middle-income trap.

"The Coming Chinese Crack-up," one of Shambaugh's articles published in the Wall Street Journal in 2015, has triggered enormous controversy. After explaining several times that the title was made by editors without his permission, he appears to be more cautious this time around, noting that China will not collapse, but that no country has developed a truly modern economy without democratizing.

Shambaugh corrected his analysis, yet he still is wrong, because the theories he used to support his views are from the US and other Western nations' experiences, which is unfit to discuss the reality in China.

Indeed, whether China can escape the middle-income trap depends on a series of factors, including sticking to its reforms, boosting its impetus for economic growth when stuck at certain income levels, and turning the impetus into a sustainable driving force for further development. Therefore, it is too early to tell whether China can escape the trap as the nation spares no effort in its structural reform and transformation. It may be a lengthy process, but can be viewed with optimism. Given that China's per capita GDP is estimated to hit $10,000 in 2020, the goal is likely to be reached during the nation's 14th Five-Year Plan (2021-25). More importantly, whether an economy can leap over the trap should not be equated with its political system.

Shambaugh obviously underestimated China's driving motive of reforms under its current political system. Despite professional policies and data, the country's impetus for development can be seen with the naked eye. The number of China's inbound and outbound tourists often hits new records during the holiday seasons, Chinese people look forward to better lives, everyone hopes to own cars and houses, they all wish for clear skies, clean water, comfortable communities and high-quality education. These are the endless sources which drive China's economic growth.

China does face a number of problems and challenges. Yet it had more challenges in every period of its history. The old obstacles have been dealt with. Therefore, there is no reason to lose faith in the nation at this point.

China moved from being poor and weak to becoming the second largest economy in the world under the current political system. It means this path works. When reviewing such an accomplishment, it is impossible to only talk about China's economic achievements without mentioning the support of its system and civilization.

None of the fast developing nations over the past decades, including the 13 nations which joined the club of high-income economies mentioned by Shambaugh, achieved what they have today because they strictly followed the prescriptions provided by Western nations. Their success stems from the development path based on their own national conditions. Many countries get stuck in the middle-income trap because they couldn't find a suitable development path and have to copy the so-called democratic system.

With this as the backdrop, how can anyone claim that China won't avoid the middle-income trap because its path is different from that of the West?



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