Bruce DicksonProfessor of Political Science and

International AffairsGeorge Washington University

Updating the China Model

Updating the China ModelCreating “national champions”Emerging middle classImproved governanceGlobal outreach and backlash

Creating National Champions“Made in China”Export Strategy without Chinese

Brands

Creating National Champions“Made in China”Export Strategy without

Chinese Brands

Lenovo Haier

Creating National ChampionsGovernment policies

Favor state-owned enterprises (SOEs)

Limit entry into Chinese marketNew “innovation” policy

Challenges

Creating National ChampionsImplications for US

Business environment in ChinaGovernment focus on exchange rate and trade balance

Emerging Middle ClassRecent trend:

Less export driven, more domestic consumption

Less based on cheap labor, more on skilled labor and urban middle class

MotivesInequalityBalanced growthNext phase of economic development

Emerging Middle ClassGovernment

policiesPopulismUrbanization

Emerging Middle ClassGovernment

policiesPopulismUrbanizationEncourage rising

wages

Strike at Honda plant

Emerging Middle ClassGovernment

policiesPopulismUrbanizationEncourage rising

wages

Suicide Nets

Emerging Middle ClassGovernment

policiesPopulismUrbanizationEncourage rising

wages

Suicide Nets Happy Foxconn worker

Emerging Middle ClassGovernment

policiesPopulismUrbanizationEncourage rising

wagesSubsidizing

consumer goods

Emerging Middle ClassChallenges

Beneficiaries of export orientation

Rising aspirationsImplications for US

Support for status quoRising nationalism

Improved GovernancePolitical reforms

Improved GovernancePolitical reformsBut not democratization

Village election

Improved GovernanceOld strategy: hasten economic

developmentRoads, railroadsTelecommunicationsEducation

New Strategy: consequences of growth and reformHealth carePensionsEnvironmentWelfare

Improved GovernanceChallenges

Consultation without accountabilityRising demands

Improved GovernanceChallenges

Consultation without accountabilityRising demands

Implications for USDemocracy promotionBut most Chinese are satisfied with

status quo

Global Outreach and BacklashSecurityResourcesCounter US influence

Global Outreach and BacklashAid without linkageBut still strings attached

Global Outreach and BacklashAid without linkageBut still strings

attached

Global Outreach and BacklashChallenges

International image

Fears of dependence

Global Outreach and BacklashChallenges

International image

Fears of dependence

Popular backlash

Peru

Kyrgyzstan

Global Outreach and BacklashImplications for US

Defense against rising ChinaImproved relations with a variety of countriesBacklash may lessen China’s appeal as

international leader

SummaryThese four goals address China’s basic

goalsChallenges and opportunities

for ChinaFor US and other countries