"Given the constructive changes that have taken place in China, and the important relationship that has grown up between Washington and Beijing in the past three decades, history has vindicated a policy of restraint." History isn't "over" yet...
History isn't "over" yet...
No kidding it isn't. The "Constructive Changes" are subject to a healthy load of salt..i.e., China's economy has not achieved full marketization because that was never part of the CCP's plan. Rather, economic reformers such as former Premier Zhu Rongji and current Premier Wen Jiabao intended to produce a leaner and more competitive -- and thus stronger -- state sector by exposing a select group of SOEs to the discipline of international and domestic market forces under the watchful eye of a sophisticated and professional regulatory bureaucracy. The prices of key commodities and factors of production (such as energy, rail transport, and, as Pei points out, labor, real estate, and credit) remain under the state's control. It is true that tens of thousands of weak state enterprises have closed or gone private since the beginning of the Deng era, but the state has selected about one thousand of the strongest and most strategically placed SOEs to receive as much state help as they need to succeed, not only domestically but in some cases globally. And although some banks have allowed foreign companies to buy minority stakes, they remain state-owned and continue to support both the state-subsidized "pillar" SOEs and state-prioritized infrastructure projects.
In short, the regime never intended to let globalization wash away either its political or its economic power. Globalists may believe that Beijing's plans are irrelevant because they fly in the face of Western theories about the inevitability of marketization and democratization. But proving that an authoritarian regime can prosper through modernization is exactly what is at stake in the Chinese experiment, which is why dictatorships from Kazakhstan to Iran are keenly watching its progress. The thesis of a "trapped transition" implies a teleology that the Chinese leadership does not accept -- and that needs to be defended rather than assumed.