"A dysfunctional model of capitalism, built on deregulation, privatisation and low wages, crashed and burned seven years ago. But the fallout from that crisis is still ricocheting around the world, from Europe to the ‘emerging economies’, as the attempt to refloat a broken model with cheap credit inflates asset bubbles and share buybacks – or enforce it with austerity – fuels new crises”.
The remnants of state planning and ownership introduced by the Chinese revolution have given it a greater capacity to cope with economic crisis, but what Milne describes as its “hybrid” model of a capitalist mixed economy hasn’t been enough to shield it from asset bubbles at home and stagnant growth in its major export markets in the US, Europe, and Japan. “China’s room for manoeuvre would certainly be much narrower if it had gone for the full deregulation and privatisation package” urged on it by these more mature capitalist economies and the international financial system under their control, Milne writes.