Chapter 9: Government’s Essential Economic Leadership Role

Looking back over China’s long record from 1978 through 2020, the presence of its central and local governments in virtually every aspect of the economy stands out. From planning commissions, development banks, grain planting requirements, and price controls to many other dimensions, the government was there — either working together with or in place of competitive market operations. How did the government organize this economic presence, and how much of it was necessary? Both economic fundamentals and China’s successful example argue two points: government must be involved and its involvement must be beneficial.