China is, to say the least, fascinating. Coase and Wang are mainly optimistic. I would like to be too. I teach there occasionally and find that the students are smart, inquisitive, thoughtful and well trained. The Chinese students that I encounter at USC are usually superb.
China's growth record of the last 30+ years is a thing to behold; hundreds of millions were lifted out of abysmal poverty. But was it a case of starting at a very low base and taking available ideas and technologies "off the shelf" so to speak? Or will there be home-grown endogenous high tech breakthroughs and innovation?
We do not know. But the news that Chinese authorities are tightening censorship and threatening to shut down VPN internet access to the outside world is awful (Gordon Crovitz comments in this morning's WSJ). The free exchange of information and ideas is the last thing to do if the regime wants to achieve economic pre-eminence. The internet is a blessing in this area; ham-fisted control is the curse.
I think that Peter Boettke once commented on the race between the three S's (Smithian exchange, Schumpeterian entrepreneurialism and political stupidity). The first two have to work very hard because the the third formidable. We see it in the U.S. almost every day. But there is nothing like an international perspective.