IT IS all too easy to envy China. At current growth rates, the Chinese economy will double in size in only nine years, raising an estimated 100-million people above the poverty line.
Compare this with the major economies of the Western world. The eurozone's gross domestic product remains mired below 2008 levels, and the US last enjoyed Chinese-style growth in 1984, when petrol cost $1.10 a gallon and the first Apple Macintosh was rolling off the production line in California.
Given such anaemic performance in recent years, it is hardly surprising that envy of China's economic dynamism has manifested itself in official policy. Recent examples range from direct market interventions such as the US effort to boost its automotive industry via the "cash for clunkers" programme, to the UK's bid to reflate the housing market by guaranteeing mortgages under its "Help to Buy" plan.
Even hitherto independent central banks have not escaped the creep towards state-sponsored capitalism. The US Federal Reserve has been gently encouraged to buy 90% of the annual net issuance of US Treasury bills, in effect funding the US fiscal deficit and ensuring, via the resulting negative real interest rates, that businesses and individuals wishing to save, rather than spend, will lose purchasing power by doing so.
Ironically, Western countries are shifting to statism at the very moment that China appears to be heading in the opposite direction — witness its recent moves to liberalise its financial system. In just 10 years, the share of state-directed bank lending in China has fallen from 92% of new credit creation to less than half.