China hasn’t forced America to adopt state capitalism. Unfortunately, we did it on our own accord, forgetting that China’s early success wasn’t due to central planning and industrial policy, but instead the gradual adoption of private ownership and market principles. In 1978, for example, state-owned enterprises accounted for nearly 80% of China’s industrial output; by 2016 their share had declined to 20%. These reforms generated rapid economic growth, though per capita gross domestic product in China today remains less than one-third that of the U.S.
In 2008, when the U.S. began to practice its own version of state capitalism, China’s market liberals were left asking, “What happened to the teacher?”