Australia and the region is benefitting enormously from China’s economic growth. Its rise is seen as perhaps the most significant illustration of economic transformation in history. From being perceived a little over a decade ago as a rogue power and one of the last, defiant bastions of communism in the world, China is now upheld as a new and compelling example of a successfully developing state.

Moreover, the recent Chinese experience and success suggests that there is no inextricable link between political liberalization on the one hand, and the successful transition to a free market system on the other. Instead, the Chinese model seems to demonstrate that there are actually advantages to having a strong, authoritarian government heavily involved in the economy, overseeing the transition process, and supervising the economy once transition is complete.

Yet, despite the impressive achievements over the past 30 years, in many respects China’s economy is vulnerable and fragile, while Chinese society and politics is characterized by serious tensions and remains highly dysfunctional. The success of China’s ongoing transition, and the direction its transition is heading are important questions for the Centre.

Key Questions

• Is China issuing a serious challenge to the common assumption about a correlation between open societies and a successful free market model? Is its model of authoritarian government on one hand, and a hybrid economic system of Leninist corporatism (where the regime retains control of the most important economic levers) supported by a limited free market on the other, sustainable?
• What is the status of current economic and political reforms in China? How are these reforms likely to play out in the future?
• Is China’s ‘peaceful rise’ inevitable or even likely? If not, what are the political and regional consequences of a Chinese state stagnating or in decline?