China Rising

• Author: Brian Aitken
• Position: Deputy Division Chief IMF Asia and Pacific Department
• Pages: 52-53

Page 52

Will Hutton

The Writing on the Wall Why We Must Embrace China as a Partner or Face It as an Enemy

Simon & Schuster Trade, New York, 2006, 432 pp., $28 (cloth).

China's radical transformation from a moribund centrally planned country to the world's fourth largest economy is one of the fascinating stories of our era. Indeed, the transformation has been so profound as to prompt the question, Will the 21st century be Chinese, just as the 20th century was American and the 19th century British? The Writing on the Wall by economist and correspondent Will Hutton addresses this question head-on, and with a narrative skill not always found in economic and political literature. His arguments are well researched and his reasoning, although at times tangential, clearly laid out.

There are really two books here. One deals with China's political and economic transformation and its implications for the rest of the world. It examines China's prospects for continuing rapid growth, given one-party rule. Grafted onto this is a somewhat less successful discussion of the advantages of economic and political pluralism.

Any reader seeking a clear and accurate explanation of China's economic successes and challenges would do well with the first half of this book. Hutton begins with a brief but lucid history of China and its interaction with the rest of the world. This covers the economic travails of the Chairman Mao years, including the early mass reorganization of the means of production, the Great Leap Forward, and the policy of radical egalitarianism. The profound failures of this period created the consensus that a reorganization of the economy was needed, and that reorganization was spearheaded in 1978 by Deng Xiaoping, the architect of modern China. A series of reforms dismantling central planning and allowing for market-based activity contributed to a surge in economic growth that has lasted 30 years. With the new century, China began liberalizing external trade with stunning success, and a flood of foreign investment helped turn the country overnight into the world's mass assembler of consumer goods.

There are many insights in Hutton's narrative. In contrast to easternPage 53 Europe, there was no top-down big bang in the path to a market economy-rather, China pursued a pragmatic, gradualist, bottom-up (or as Hutton also argues, piecemeal and reactive) approach to reform, "crossing the river groping for stepping stones," as Deng put it, which...