Betting on the Role of the State

Abstract

Making all the structural changes under the pressure of the Impossible Trinity inevitably questions the role of the state versus the market. My conjecture of President Xi Jinping’s interim reform strategy of power re-centralisation (see Chapter 2) suggests that a re-thinking about the role of the government in the future economic development process might be under way in the core leadership. The latent force behind such reassessment is a conventional wisdom that says that China would only succeed in reforming itself by fully embracing the market. This should put the Chinese Communist Party on the defensive.