How Beijing's Economic Playbook Reworked the International System and How the World Adapted
The rise of China as an economic superpower in the 21st century has not only reshaped global trade and financial flows but has also fundamentally altered the international system itself. Beyond its sheer economic might, China has exported an alternative development model, one that challenges the long-standing liberal economic orthodoxy championed by the West. This essay argues that China has already remade the international system by demonstrating the viability and attractiveness of its state-led economic playbook, which has been increasingly adopted, or at least considered, by numerous countries across the globe.
For decades, the dominant narrative in international economic development was centered on the Washington Consensus. This set of policies, advocating for deregulation, privatization, and trade liberalization, was promoted by institutions like the World Bank and the International Monetary Fund as the pathway to economic prosperity. However, China’s spectacular economic growth since the late 1970s, achieved through a unique blend of state intervention, export-oriented industrialization, and gradual market reforms, presented a compelling counter-narrative. China’s model, often termed “state capitalism” or “market Leninism,” has shown that rapid development is possible without fully embracing the neoliberal prescriptions of the Washington Consensus.
One of the key aspects of China’s economic playbook is the active role of the state in guiding and shaping economic activity. Unlike the laissez-faire approach favored by liberal economists, the Chinese government plays a central role in strategic planning, industrial policy, and investment decisions. State-owned enterprises (SOEs) remain significant players in key sectors, and the government directs credit and resources to priority industries. This approach has allowed China to build up its manufacturing capacity, develop advanced technologies, and invest heavily in infrastructure, leading to rapid economic growth and structural transformation.
The success of China’s state-led development model has had a profound impact on the international system. Many developing countries, particularly in the Global South, have looked to China as an alternative to the Western model. They see China’s experience as evidence that it is possible to achieve economic progress without adhering to strict neoliberal conditions. This has led to a growing interest in state-led industrial policies, infrastructure development, and strategic interventions in the economy, all hallmarks of the Chinese playbook.
Furthermore, China’s Belt and Road Initiative (BRI) has further accelerated the diffusion of its economic model. The BRI, a massive infrastructure and investment project spanning across Asia, Africa, and Europe, has provided many developing countries with much-needed financing and technical expertise. Unlike traditional Western aid, which often comes with conditions related to governance and human rights, China’s BRI projects are primarily focused on economic development and infrastructure building. This has made them attractive to many countries that are wary of Western interference in their domestic affairs.
The BRI has also promoted the adoption of Chinese standards and technologies in participating countries. As Chinese companies build infrastructure projects and provide equipment, they often introduce their own technical specifications and practices. This has led to a gradual shift away from Western standards and a greater alignment with Chinese norms. This process of technological and regulatory diffusion is further solidifying China’s influence in the international system.
Moreover, China’s economic success has challenged the intellectual foundations of the liberal international order. The notion that free markets and minimal state intervention are the only pathways to prosperity has been called into question. China’s experience has shown that a more pragmatic and state-driven approach can also yield impressive results. This has led to a greater acceptance of diverse development models and a weakening of the ideological dominance of neoliberalism.
The adoption of elements of China’s economic playbook is not limited to developing countries. Even some advanced economies have begun to reconsider their traditional approaches and explore more state-led interventions. For example, in response to the 2008 financial crisis, many Western governments implemented substantial stimulus packages and intervened in financial markets, actions that would have been unthinkable under strict neoliberal orthodoxy. Similarly, there is growing recognition of the importance of industrial policy in promoting innovation and competitiveness, leading to renewed interest in strategic interventions in key sectors.
However, the adoption of China’s economic playbook is not without its challenges and limitations. The Chinese model is highly context-specific and may not be easily transferable to other countries. Its success is predicated on a strong and capable state, a disciplined bureaucracy, and a unique set of historical and cultural factors. Countries with weak institutions, high levels of corruption, or different political systems may struggle to replicate China’s achievements.
Furthermore, the Chinese model also has its drawbacks. The emphasis on rapid growth and infrastructure development has sometimes come at the expense of environmental protection, social welfare, and labor rights. The lack of transparency and accountability in the Chinese system can also lead to inefficiencies and corruption. Moreover, the growing debt burdens associated with BRI projects have raised concerns about debt sustainability and potential dependency on China.
Despite these challenges, the fact remains that China has already remade the international system by demonstrating the viability of its alternative economic model. The widespread interest in state-led development, the adoption of Chinese technologies and standards, and the weakening of neoliberal orthodoxy are all testaments to China’s growing influence. The international system is no longer dominated by a single economic paradigm but is increasingly characterized by a diversity of models and approaches.
In conclusion, China’s rise has not only transformed the global economy but has also reshaped the international system itself. By demonstrating the success of its state-led economic playbook, China has provided an alternative to the Western model and has inspired many countries to rethink their development strategies. While the adoption of China’s model is not without its challenges, its impact on the international system is undeniable. The future of the international economy will likely involve a greater diversity of development models and a more multipolar distribution of economic power, with China playing a central role.
Nine International Economic Researchers:
Dani Rodrik: A Turkish economist known for his work on globalization, economic growth, and development economics. He has written extensively on the limitations of the Washington Consensus and the importance of context-specific development strategies.
Alice Amsden: An American political economist who specialized in the industrialization of developing countries, particularly in East Asia. She emphasized the role of the state in promoting industrial development and challenging conventional theories of economic growth.
Robert Wade: A British political economist known for his work on East Asian development and the role of the state in industrial policy. He has written extensively on the "governed market" economies of East Asia and their implications for development theory.
Ha-Joon Chang: A South Korean economist specializing in development economics. He is critical of neoliberalism and advocates for a more interventionist approach to economic development.
Jeffrey Sachs: An American economist and director of the Center for Sustainable Development at Columbia University. He is known for his work on economic development, poverty reduction, and global health.
Joseph Stiglitz: An American economist and Nobel laureate known for his work on information asymmetry, market failures, and development economics. He has been critical of neoliberal policies and the Washington Consensus.
Branko Milanovic: A Serbian-American economist known for his work on income inequality and global income distribution. He has written extensively on the economic rise of China and its impact on global inequality.
Barry Naughton: An American political economist specializing in the Chinese economy. He has written extensively on China's economic reforms, industrial policy, and state-owned enterprises.
Minxin Pei: A Chinese-American political scientist specializing in Chinese politics and governance. He has written on the challenges of political reform in China and the implications of its economic model.
