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Evening Standard
Evening Standard
Business
George Lagarias

Is China's new industrial policy a 'Great Leap Backward'?

The biggest point of differentiation between Western-style democracies and more centralised-type governments is the speed and linearity of progress. Western countries progress linearly and incrementally. Innovation breeds innovation. Social progress begets social progress. In more centralised governments, layers of bureaucracy need to be overcome before something new emerges. Decisions need to be planned and then implemented. That doesn’t mean progress is perpetually stuck. It means that, when it comes, it does not do so in increments but in “leaps”.

Such a leap was the “Great Leap Forward”, a Chinese economic and social campaign to move the country from the primary sector, agriculture, into the secondary, manufacturing. The force and speed of the move was so intense, that they led to the greatest famine in human history, with death estimates ranging from 15 to 55 million. From a statecraft point of view, of course, the Leap was a success. China’s manufacturing capacity buildup served as the foundation for the country’s economic dominance in Asia, its entrance to the WTO and the ‘global economy’ status it has enjoyed in the past three decades.

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