Is China’s growth model a threat to free-market economics?

Not only has it successfully increased its GDP per person more than 20-fold and lifted hundreds of millions of its citizens out of poverty since it launched its reform-and-opening policy some four decades ago, China has also managed to become a global leader in new technologies such as big data, artificial intelligence and mobile internet applications.

They will ask whether this new model will challenge or even topple the traditional model of free-market economics, which hitherto has been widely regarded as the underpinning of economic growth elsewhere.

It seems inevitable that more countries and global leaders will debate whether China has established a new model of economic development

Some people attribute Chinas success partly to its extensive geographical area and the homogeneity of its language, culture and valuesassets which are conducive to forming a giant domestic market that can propel economic growth.

Starting in the agricultural sector, the allocation of labour gradually became determined by the market rather than by government central-planners.This transition put the right people into the right jobs, unleashed entrepreneurial initiative and made workers more productive.After initial success with labour reform, other important inputs such as land and capital were also gradually exposed to market forces.

Rather, it may be in harmony with the free-market-based paradigm of neo-classical economics.