Justin Lin: Why China Didn’t Collapse

Apr 17-2019   

Viewed through mainstream theories, China is riddled with problems; No wonder whenever the Chinese economy slowed a tad, cries of “China Collapse” would spring up in international media, says Prof. Justin Lin in his recent speech. “But in fact not only did China never collapse, it has always maintained stable and rapid growth.” He continues to point out that what China has accomplished over the last forty years of reform and opening up – by taking its own road - is not less than a miracle in the economic history of mankind. By juxtaposing China’s economic transformation and that of other developing countries, Prof. Lin, Honorary Dean of NSD, draws attention to the fact that China was no different from many countries in the 30 years since the founding of PRC, but has taken off and broken away from the pack since 1978. Rather than following the so-called Washington Consensus, China started with gradual implementation of double-track reform out of respect for reality. He argues that mainstream economic theories reflect the phenomena and experiences of developed countries and thus disregard the structural endogeny of different economies. Many developing countries go for wholesale adoption of the institutional structures of developed countries, which in fact should be the goal rather than the means. He concludes that China’s reform and development provides fertile soil for theoretical innovation, and Chinese economists should not fail this historic opportunity.