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What If China Is Exempt From the Laws of Economics?

Beijing’s policymakers seem to be doing a lot of things right—and that may upend much of basic economic thinking, especially our faith in the power of free markets.
The headquarters of the People’s Bank of China in Beijing.

The headquarters of the People’s Bank of China in Beijing.

Photographer: Imaginechina/AP Images

Over my two decades of writing about economics, I’ve devised a list of simple maxims that I’ve found generally hold true. One is that history repeats itself. If one country tumbled into a financial crisis, there is a very good chance another, facing similar conditions, will as well. A second rule: What doesn’t work, doesn’t work. A policy that failed isn’t likely to achieve any better results if tried again. I developed these little rules as a journalist watching what works and what doesn’t—from Japan to Russia to Spain—and attempting to understand why things just go so wrong so often, whether during the 1997 Asian crisis or the turmoil that nearly ripped apart the euro zone earlier this decade.

But recently, my faith in this corpus of collected wisdom has been badly shaken. By China.