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The Modern-Day Choice between Free Markets and Socialism

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Published March 30, 2021

China’s economic gains have come at a substantial cost to its people and to its neighbors. Despite its recent economic success, the People’s Republic of China is not looked on as a role model by its neighbors, and few countries are rushing to embrace its style of socialist authoritarianism. Instead, these nations continue to look to democracy and markets as the institutions that deliver widespread prosperity and stability.

Discussion Questions:

  1. What are the costs of China’s economic gains?
  2. What are the effects of China’s responses to looming challenges?

Additional Resources:

  • To learn more, read “How Freedom Is Caught between Socialism and Capitalism in the Indo-Pacific,” by Michael Auslin. Available here.
  • Read “Freedom’s Struggle in the Indo-Pacific,” by Michael Auslin. Available here.
  • Read “China versus Democracy,” by Michael Auslin via the National Review. Available here.
View Transcript

Some critics of capitalism point to China’s economic improvements as proof that government control of the economy can deliver widespread prosperity. 

But it is becoming more apparent that China’s economic gains have come at a substantial cost to its people and to its neighbors. 

The poverty of life under authoritarian rule is evident as Chinese society turns inward at the order of Xi Jinping and the Chinese Communist Party. 

Already facing a macroeconomic slowdown, the Chinese people are finding their lives becoming less free and more controlled by the Party. 

Meanwhile, the elite in China increasingly hold foreign passports, own property abroad, 

and are sending more of their money out of the country, suggesting that they doubt the sustainability and stability of the Chinese economic system. 

The communist party is well aware of these looming challenges. 

They have responded with harsh policies that have reemphasized socialist ideology and clamped down on civil society. 

And tragically, their efforts have succeeded in destroying Hong Kong’s democracy and threatening Taiwan. 

It’s no wonder then that few countries are rushing to embrace the type of socialist authoritarianism offered by the Chinese government. 

Despite its recent economic success, the People’s Republic of China is not looked on as a role model by its neighbors. 

Instead, these nations continue to look to democracy and markets as the institutions that deliver widespread prosperity and stability.