Looking at the five points above, there is some truth to them. This perspective isn’t new — Zhang Wuchang (Steven Cheung) proposed a similar explanation many years ago, describing it as competition among county and municipal leaders. However, this view is still overly one-sided.
1)It overemphasizes the bottom-up role of local governments in driving these industries while ignoring the central government’s overall contributions in policy supply, risk control, tax regulation, and nationwide resource coordination. In reality, compared to Europe, the United States, or the North American Free Trade Area, transaction costs within China’s unified domestic market are far lower — and far more efficient — than those under any inter-country trade agreements or alliances.
2)Over the past few decades, local governments’ bold (and sometimes reckless) development efforts have brought tremendous vitality to the economy, and the contributions of private enterprises deserve full recognition. That said, we must also acknowledge that local governments and private businesses have created some massive pitfalls for the entire country. Examples include the earlier P2P lending chaos and the real estate bubble. In the end, it was the national-level authorities that had to step in to intervene and clean up the mess — something that free trade zones and economic alliances simply cannot compare to.
3)Private economy and capital do not possess any real strength to challenge the central government. A few individual businessmen once got carried away and thought their commercial empires could confront the central government — such as Wanda and Alibaba at their peak — but they all ended up crashing hard and being forced to behave obediently. Outsiders fundamentally cannot comprehend how powerful the central government’s control over China truly is.
4)China’s success — whether the outside world admits it or not — stems from the governance of the Chinese Communist Party. This is something no other country can easily replicate. It is precisely because of a strong central government that China can look beyond short-term gains and losses and strategically plan long-term industrial chains and cutting-edge industries that require extended incubation. This is extremely difficult for democratically elected countries that only care about short-term public opinion and voter support. This is also a point the West must deny, because acknowledging it would imply that their entire national organizational systems need to be fundamentally rebuilt — and Western societies currently lack the courage and resolve to push through such reforms.
5)The success of China’s more than 40 years of reform and opening-up is obvious to all. However, what is more easily overlooked is the hard foundational work done in the first thirty years after the founding of the People’s Republic. The outside world often only focuses on the negative aspects of that period — the Anti-Rightist Campaign, the Great Leap Forward, and the Cultural Revolution — while ignoring the monumental achievements: widespread literacy campaigns, bandit suppression, drug prohibition, gambling crackdowns, rehabilitation of prostitutes, land reform, universal rural healthcare, eradication of various parasitic diseases, recovery of Xinjiang and Tibet, liberation of serfs, resistance against foreign aggression, development of nuclear weapons and satellites, large-scale water conservancy projects, establishment of a complete industrial system, and securing a permanent seat on the UN Security Council. Without this solid foundation, the great achievements of the past 40 years of reform and opening-up would have been impossible.
5. This also explains "What's wrong with China providing us with solar and other renewable energies?"
When local officials rise, the industries they sponsor rise with them — but when those officials fall, the industries can be restructured or consolidated.
That is essentially what happened in rare earths: an industry once fragmented across provinces and cities competing fiercely (and often corruptly) was eventually consolidated under central control.
The result is not just economic power, but geopolitical leverage — whether through higher prices or, potentially, supply restrictions against countries China has political disputes with, as we’ve seen in recent months.
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