Bill Overholt says, 'China's situation today is a little like that of an entrepreneur, who has invented a good widget, done well in marketing it, the company is taking off, and it's gotten to a certain point where they have to do the IPO.'
- 'Now, it needs professional accounting and professional human resources and so on. It needs a transformation in order to keep going. If it succeeds at that transformation, take off continues, and if it doesn't, it flops.'
- 'The core issue for China is dealing with the social complexity that comes with economic success.'
From simple to complex. 'China doesn's have simple infrastructure, agriculture, and government manufacturing anymore. There are thousands of sectors.'
- 'In the power sector, you have all kinds of different power production systems: coal, solar, wind, hydro. You have conflicts between the producers and the distributors, who are no longer the same companies.'
- 'There are thousands of software firms in conflicts between the users and the owner, inventors. And, so on.'
- 'These sectors are big and powerful and assert their interests.'
- 'China's economy just got too complicated to be managed from a few offices in Beijing anymore.'
'China's leadership recognized the issue; they saw it coming; and they addressed it.'
- 'They decided, "Instead of trying to make all the major decisions in the NDRC, the National and Development Reform Commission, we're going to have market allocation of resources. It's going to be done automatically by the market, and it’s going to be more efficient."'
'From that premise, like somebody developing a system of mathematical theorems, they deduced hundreds of individual policies to implement that market allocation of resources. They consulted Nobel Prize winners, they consulted all kinds of private sector actors, as well as government officials.'
'The end result was China 2030: Building a Modern, Harmonious, and Creative High-Income Society prepared jointly by the World Bank and the Development Research Center of the State Council.'
- 'It's hard to find a more impressive economic plan anywhere else in economic history.'
'China 2030 was announced as a report of the Third Plenum, with great detail about what they planned to do after Xi Jinping took power.'
- But, 'in the politics and implementation, it's gotten complicated.'