China’s economic model catching on in the world

China’s economic model catching on in the world April 24, 2009

The old way of global domination was through military conquest. Now a country can take over the world by just buying it. This article, China Uses Global Crisis to Assert Its Influence –, shows how that country is widening its sphere of influence by loaning money to developing nations around the world that are hurting from the current economic collapse.

It also shows how the ideological tide seems to be turning against the “Washington Consensus,” with its combination of free markets and democracy–that developing countries used to want to emulate to the “Beijing Consensus,” which allows for limited free markets under the control of an authoritarian state:

Coined by British economist John Williamson 20 years ago, the term “Washington Consensus” refers to a standard set of policies — including privatization of state enterprises, free trade, deregulation and restraint in public spending — that the International Monetary Fund, the World Bank and the U.S. Treasury Department have long urged on debt-ridden nations, particularly in Latin America. . . .

“It is very possible that the Beijing Consensus can replace the Washington Consensus,” said Cui Zhiyuan, a professor of public policy at Tsinghua University who edited a recent book on the subject. “Since the crisis, the world doesn’t have as much confidence in the U.S. economic model as before.” . . .

Cheng Enfu, an economics researcher at the Chinese Academy of Social Sciences, a government-affiliated think tank, said he defines the Beijing Consensus as promotion of economies in which public ownership remains dominant; gradual reform is preferred to “shock therapy”; the country is open to foreign trade but remains largely self-reliant; and large-scale market reform takes place first, followed later by political and cultural change.

The global economic crisis, Cheng said, “displays the advantages of the Chinese model” and has already expanded China’s influence. “Some mainstream economists are saying that India should learn from China; Latin American countries are trying to learn from China. When foreign countries send delegations to China, they show interest in the Chinese way of developing,” Cheng said.

Then again, maybe the new Washington consensus is to adopt the Beijing consensus.

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