FT – Book Review – Nick Lardy’s Sustaining China’s Economic Growth after the Global Financial Crisis

In 2004, Beijing announced a big shift in the country’s economic model. No longer would it rely on investment and exports. Instead, consumers would lead the way. As Premier Wen Jiabao said later, growth had become “unsteady, unbalanced, unco-ordinated and unsustainable” – a danger to China and the world. But something went wrong. Despite repeated pledges and policies to achieve rebalancing, the Chinese economy swerved in the opposite direction. Nicholas Lardy, an economist who began writing about China when Mao Zedong ruled four decades ago, examines in his latest book why, and what can be done to fix it. That China needs fixing might seem odd. While other nations are mired in crisis, the Chinese economy expanded by 9.2 per cent last year and the government is in rude fiscal health. Lardy shines a light on the cracks. His book is a useful corrective to both the triumphalism increasingly heard in Beijing and the predictions of imminent collapse heard abroad. But it is dense. Introducing one chapter, he candidly warns it is “dry and technical yet important” – a fitting description of the book as a whole.
FT