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Print Edition> Nation
UPDATED: July 11, 2011 NO. 28 JULY 14, 2011
Success Comes From Political System
Exploration of a China-style development path has paid off

So why is China able to cope with the international financial crisis so successfully in comparison with other countries? What have we come to realize? And what lessons can we learn? First, China has gained a full insight into the economic laws of the socialist market economy and the political superiorities of the socialist system. Second, China succeeds in balancing the relationship between government and market forces. In other words, it asserts the leading role of the government while giving full play to the basic role of market forces in the allocation of resources. For example, the stimulating effect of the government's 4-trillion-yuan ($586 billion) investment in 2009-2010 helped generate more than 10 times this amount in non-governmental investment. The country's total investment in fixed assets during this two-year period reached 50.3 trillion yuan ($7.76 trillion), which effectively ensured the rapid economic growth of the country.

Different nations exhibit different capacities for development and different levels of national strength. They have also demonstrated different levels of performance in their respective responses to the international financial crisis. We can attribute China's ability to coping successfully with the crisis to five aspects: first, the ability of the Chinese people to study as a whole, respond flexibly to unfavorable situations and excel in competition; second, the highly efficient decision making mechanism of the government; third, the government's huge capacity for political mobilization; fourth, China's constantly growing fiscal power; and fifth, the country's ability to give full reign to the initiative of both central and local governments.

The essence of the international financial crisis, which originated in the United States and later spread across the world, is an unprecedented crisis of capitalism. China's success in coping with the international financial crisis has captivated large numbers of American scholars, and encouraged them to engage in self-reflection over this capitalist crisis. One of the most eye-catching instances of this type of self-reflection is a recently published article by American scholar Francis Fukuyama, in which the author says China's success in navigating the economic crisis was based on the ability of its political system to make large, complex decisions quickly, and make them relatively well, at least in economic policy. In comparison, the United States lacks the capacity to respond rapidly to a crisis. Compelled by fact, Fukuyama's words can be construed as a partial correction or even a negation of the theories he published 20 years ago in The End of History.

In brief, the "Chinese Path" is not only unprecedented, but is also becoming more and more successful. The best thing we can do is go our own way despite others' skepticism.

The author is director of the Center for China Studies at Tsinghua University. This article is reprinted from issue No.2 of 2011 of Qiushi (English version), organ of the Central Committee of the Communist Party of China

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