A Brief History of Chinese Industrial Policy

The most impressive economic success story of the past 30 years has been the astonishing resurgence of China, which is likely to become the world's third-largest economy this year. The length of time that the country has managed to grow at double-digit rates has astonished even the biggest China bulls, and the transformation which has been effected in the country – including, by the way, the largest and fastest decrease in poverty that the world has ever seen – has been nothing short of breathtaking.

Brad DeLong's story of China since 1978, told in response to a blog entry by Dani Rodrik, is an encapsulation of the Great Man theory of history:

In 1978 China had its first piece of great good luck in a long, long time--perhaps the first time some important chance broke right for China since the end of the Sung dynasty. China acquired as its paramount ruler one of the most devious and effective politicians of this or indeed any age, a man who was quite possibly the greatest human hero of the twentieth century: Deng Xiaoping.

Tyler Cowen Alex Tabarrok says the whole post is "superb," and "one of Brad's best ever". I like it too, although, apropos Brad's conclusion, I'm still a bit confused as to exactly what the crucial difference was between Deng and Juan Peron, that the former's policies were so successful and the latter's were so disastrous. In any case, if you want a summary of Chinese industrial policy in a thousand words or less, as well as an object lesson in the high level of debate that often occurs in the econoblogosphere, this is a great piece to read.