Summary: The review highlights that understanding China’s economy is crucial, as it reveals issues like capital controls and malinvestment resulting from state-led growth. The authors argue that China’s economic model, which relies heavily on infrastructure spending, has led to inefficiencies and potential stagnation. They emphasize that genuine economic growth depends on improving productivity rather than just increasing inputs.
In practice, authoritarian states (including China) are often far more short termist than market based democracies, because signals about the rational allocation of resources (like what people want to invest in, how they value different goods, where they want to live and work) are systematically repressed for political benefit. (View Highlight)