The anti-Keynesian free market tide is rising in China

An interesting story about market reforms in China but this particularly caught my eye:

China’s leaders, including a group of pro-market bureaucrats who seem to have gained in the leadership shuffle this year, seem to think that more government spending could worsen economic conditions and that the private sector needs to step in. . . .

The new leaders, who took office in March after a once-in-a-decade leadership transition, seem more determined to change course. In his speech this month, delivered to party officials nationwide by teleconference, Mr. Li, the prime minister, said, ‘If we place excessive reliance on government steering and policy leverage to stimulate growth, that will be difficult to sustain and could even produce new problems and risks.’

‘The market is the creator of social wealth and the wellspring of self-sustaining economic development,’ he said.

He spoke of deregulation and slimming down the role of government.

‘Li Keqiang thinks like an economist,’ said Barry J. Naughton, a professor of Chinese economy at the University of California, San Diego. ‘He wants the government to get out of the way.’

He actually doesn’t think like an economist, at least not an economist of the modern generation. But this is a tide that is rising. Watching the effects of regulation and the stimulus has been a very clarifying experience at least for some. The obstacles must be immense but at least there is recognition at the top about what now must change.

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