How China Avoided the Economic Fate of Russia: :The New Economy Saturday


In the closing decades of the 20th century, the prevailing wisdom among Western economists was that post-Communist countries should hasten their transformation into market economies by pushing “Big Bang” price reforms.

Had China listened to that advice, it may well have ended up like Russia— an economic disaster, argues Isabella Weber, the author of the new book, “How China Escaped Shock Therapy: The Market Reform Debate.”

Instead, China opted for gradual change, a cautious and pragmatic approach that came to be known as “crossing the river by feeling for the stones.” But this decision came only after a fierce internal debate that, as Weber shows in her gripping narrative, could have gone either way. A decisive moment was the Tiananmen Square protests, fueled by rising inflation, that ended in mass bloodshed.

Deng Xiaoping Portrait Square in Shenzhen,…

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