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China's Dueling Economic Theories

One strengthens the state. The other favors the private sector

Should China push for radical reform or return to a more government-directed economy? It’s a familiar question made more urgent by the downfall of Bo Xilai, seen by many as a leader of the Communist Party’s conservative faction. A recent People’s Daily editorial that strongly supported more reform, plus a call by the World Bank and a research arm of China’s Cabinet for a smaller state role in financing and industry, have highlighted the issues. “The debate will be messy,” wrote Standard Chartered China economist Stephen Green in a March 1 report. However, he added, “something good is stirring in Beijing.”