For those who wonder where China is heading (and perhaps like myself find it hard to give a definite answer) there are some interesting arguments around.

Jonathan Fenby in his latest blog has looked sceptically at predictions of China's "inexorable rise". Here are some more challenging ideas from documents published recently:

1. The World Bank says in its China Quarterly Update that it now expects Chinese economic growth (GDP) of 9.5 per cent this year. This would actually mean - amazing as it may seem - a slight slowdown since growth for this year's first quarter was 10.2 per cent.

The WB urges China to "take structural measures in medium term to rebalance its economic growth", particularly by shifting government spending from investment to "health, education and the social safety net". Such appeals have been made in vain before but they do chime with what is now being said by President Hu JIntao and Premier Wen Jiabao.

The Chinese media has also picked up on a World Bank calculation that "China has overtaken Britain by the tiniest of margins to become the world's fourth-largest economy" (China Daily, 4 July). This is not very meaningful because of the disparity in population, but it does remind us that the Great Leap Forward was supposed to "catch up and overtake Britain" - so they've finally done it!

2. Chinese economist Hu Angang has an important article arguing that we need to take into account the negative effect on the environment of the Chinese economic boom (environmental capital loss). "The proportion of China's loss of natural capital in (its) GDP" is shocking, he says, quoting another set of WB figures.

China has now overtaken the US to become "the country with the biggest natural asset loss". Hu calls this "black development" and argues that "green development" is now the only feasible policy for China. China must be firm in following this path so that man and nature can live in harmony.

Hu is often consulted by the Chinese government. This article appears to be a revised version of one originally written by him in 2001 which was circulated internally by then Premier Zhu Rongji.

3. Peter Kwong, professor of Asian American studies at City University of New York, has an article in CounterPunch titled "The Chinese Face of Neo-Liberalism". In it, he describes how in 1980 he attended a lecture in Beijing by Milton Friedman, high priest of neo-liberal economics: the audience was packed with top communist officials.

Kwong argues that the Chinese leadership embraced neo-liberalism very early on with enthusiasm, and that "the secret of China's economic miracle is its browbeaten working class."

Are we beginning to see in China a reaction to the uncritical adoption of market economics? Certainly the current leadership talks a different language from that of the Deng Xiaoping/Jiang Zemin era. And if Beijing is attempting to throttle back on damaging hyper-growth, can it succeed?

These questions about China's development strategy are more urgent than those which we ask about the future of its political system. Whether Beijing can effectively tackle the contradiction between unrestrained growth and the deteriorating environment will be the key to China's future. And I don't think that either "socialism with Chinese characteristics" or "capitalism with western characteristics" has the solution.

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