China's economy is struggling post-COVID-19. Growth is slower than expected, demographic trends are negative, youth unemployment is high, overbuilding has created a housing crisis, and government indebtedness is ballooning. These are only a few of the symptoms ailing the country, and things could get worse. Did any of the Americans who not long ago wanted to implement some of China's top-down economic policies see this coming? Of course not. We've seen these pessimists make similar mistakes before.
Indeed, much of the economic narrative of the late 20th century was consumed by Japan's meteoric rise. Just a few decades ago, many in academic and policymaking spheres made similar predictions about how Japan's postwar resurgence portended U.S. demise. Many also advocated replacing our free market policies with the heavy-handed economic interventions that they were confident formed the secret sauce of Japan's fast growth: industrial policy.
