Development in Defiance of the Washington Consensus

Development in Defiance of the Washington Consensus:

"China has carried off the world's largest reduction in poverty by grasping that market economies cannot be left on autopilot
China is about to adopt its 11th five-year plan, setting the stage for the continuation of probably the most remarkable economic transformation in history, while improving the wellbeing of almost a quarter of the world's population. Never before has the world seen such sustained growth; never before has there been so much poverty reduction.

Part of the key to China's long-run success has been its almost unique combination of pragmatism and vision. While much of the rest of the developing world, following the Washington consensus, has been directed at a quixotic quest for higher GDP, China has again made clear that it seeks sustainable and more equitable increases in real living standards. China realises that it has entered a phase of economic growth that is imposing enormous - and unsustainable - demands on the environment. Unless there is a change in course, living standards will eventually be compromised. That is why the new plan places great emphasis on the environment.

Many of the more backward parts of China have been growing at a pace that would be a marvel, were it not that other parts of the country are growing even more rapidly. While this has reduced poverty, inequality has been increasing, with growing disparities between cities and rural areas, and coastal regions and the interior. This year's World Bank world development report explains why inequality, not just poverty, should be a concern, and China's plan attacks the problem head on. The government has for several years talked about a more harmonious society, and the plan describes programmes for achieving this. "