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THE END OF THE BEIJING CONSENSUS
The Chinese model of authoritarian economic growth cannot survive.

Yang Yao

The Times of India, February 13, 2010

Since China began undertaking economic reforms in 1978, its economy has grown at a rate of 10 per cent a year, and its per-capita GDP is 12 times greater than it was three decades ago. Analysts attribute the country's success to its unconventional approach to economic policy - a combination of mixed ownership, basic property rights, and heavy government intervention. TIME magazine's former foreign editor, Joshua Cooper Ramo, gave it a name: the Beijing Consensus.

The term Beijing Consensus is used in reference to as well as a foil to the Washington Consensus. As the finance ministry explained, the Washington Consensus originated from a 10-point market-oriented policy prescription that the US pushed crisis-plagued South American countries to adopt in return for aid in the late 1980s. It is often described as an expansion strategy for US-style capitalism. The Beijing Consensus is summarised by several key concepts used by the Chinese government to describe its growth model, such as step-by-step economic reform, balanced development strategies and the "peaceful rise of China."

But, in fact, over the last 30 years, the Chinese economy has moved unmistakably toward the market doctrines of neoclassical economics, with an emphasis on prudent fiscal policy, economic openness, privatisation, market liberalisation, and the protection of private property. Beijing has been cautious in maintaining a balanced budget and keeping inflation down. The country is the world's second-largest recipient of foreign direct investment, and domestically, 80 per cent of its state-owned enterprises have been released to private hands or transformed into publicly listed companies.

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