A few days ago on Curious Capitalist, I asked whether China was headed for trouble due to the potential damage done to its banking system by the government's giant stimulus program. One of our readers, identified as tanboontee, was kind enough to write a very interesting comment. Here's an excerpt:
Excessive debts in the west support lavish lifestyles, not necessarily so in China. Do not forget that capitalism is already malfunctioning. What's wrong with introducing a new paradigm?
This has become a common view, not just out here in Asia, but around the world. Many observers believe China has developed a “new paradigm,” a superior economic model that challenges the dominance of Western ideas about economies. But I have a question for tanboontee, and for anyone else who wants to jump in on this discussion – what exactly is this “new paradigm?” From what I can tell, China is employing economic tools that many other countries have tried in the past, with both good and bad results.
But what we've learned from historic examples is that the state-led aspects of "mixed" economies can create as much harm as good. Bureaucratic meddling was a key factor behind Japan's
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