— King Wen, Greater Odes, Shijing (11^th century BCE), quoted by Xi Jinping in 2018

Sinology, known as national studies in modern China, is not only the study of classical Chinese culture and history, but also the cultural framework that unified China and the broader Sinosphere for two millennia. In China, Korea, Vietnam, and Japan, it was the foundation of elite education and the basis of civil service examinations until major Western contact in the 19^th century.

Albeit much younger in surviving writings than Egypt and Mesopotamia, the Chinese civilization is unique in its largely unbroken cultural lineage, dating back to the founding of the Zhou dynasty in 1046 BCE if not earlier. Unlike Greece and Iran, where Christianity and Islam combined with long periods of foreign rule have radically reshaped their cultures, China has preserved.

Beginning in the European Age of Discovery, the West has led the world with its technological superiority. Faced with challengers of a distant culture, be it Japan or Iraq, it did not respond with intelligent policy informed by history and culture, but with military domination. In the case of China, however, it’s neither feasible nor desirable. To understand the puzzle that is China, in addition to a grasp of its political economy (article here), a basic knowledge of Sinology is essential. From the masses to the highest levels of the CCP, its imprint is subtle yet profound.

Below are the four classic texts that in this writer’s opinion serve as the best entry point. Composed by masters in Sinology, they cover literary Chinese, traditional Chinese literature, ancient Chinese history, and classical Chinese philosophy, respectively. Traditionally, the first is known as minor studies (小學), and the rest are known as major studies (大學).

“Introduction”, Chinese (1988) by Jerry Norman

The Chinese language, especially in its written form, has always been one of the most powerful symbols of this cultural unity. The aptness of language as a symbol of cultural and even political unity was facilitated by the use of a script that for all practical purposes was independent of any particular phonetic manifestation of their language, allowing the Chinese to look upon the Chinese language as being more uniform and unchanging than it actually was. Such a view was no doubt also reinforced by the use of a literary language which changed but little from century to century and from dynasty to dynasty.

Despite disparate oral speech and national origins, China and its environs relied on a mostly static written language for thousands of years. In China, the transition from classical Chinese to written vernacular Chinese only began in 1917 with the New Culture Movement. Based on logograms and simple grammar, classical Chinese exerted an innate centripetal force that eluded Latin, an alphabetic language with complex inflections. As the author, a great scholar on Chinese, observes, even centuries of political disunity in China did not lead to a divergent script. At least not once the Qin dynasty was established in 221 BCE. As a result, Chinese texts from before the birth of Jesus are still accessible to and consumed by educated Chinese and East Asians, whereas Beowulf is only read by English experts without translation. In fact, 52% of the articles in the middle-school Chinese textbook mandated nationwide by the Ministry of Education are in classical Chinese. Written in a highly concise form resting upon contexts and allusions, classical Chinese frequently bedevils Western translators.

In recent years, leveraging a strong central government and modern media, China has achieved a broadly shared spoken language, an unprecedented feat.

“On Chinese Lyrical Tradition”, Tamkang Review (1971) by Chen Shih-hsiang

The Chinese lyrical tradition stands out, when it is juxtaposed against the Europeans, which by contrast I would characterize as epical and dramatic. We have evidence in both literary creativity and critical canon. Everyone is wonder-struck by the great Homeric epics and then tragic and comic drama, which marked the first full flowering of Greek literature. But equally striking by contrast is the conspicuous absence of anything like an epic, when Chinese creative literature arose, in its own way no less impressive, we’d like to think, and matured contemporaneously with the Greek since about the 10th century B.C. And there was no drama to speak of until more than 2000 years later. Its glory lay elsewhere, in lyrical poetry. Its origin is exemplified by the Shih Ching, Book of Songs, which, with Shih by definition as “song-words”, part and parcel identified with music, and with its pervading personal tone, its common human concern and immediate appeal, fitted in every way the entire essence of the lyric, long since acclaimed.

In contrast to the Greeks and the Vikings, who prized epics, dramas, and sagas, the core of classical Chinese literature is lyrical poems. In Shijing and Chuci, the two foundations of traditional Chinese poetry, we generally don’t see stories of heroic warriors, tragic love, or meddling gods. Instead, the main theme is deep secular concern for human suffering and desire for moral government, similar in spirit to Byron’s The Isles of Greece. In Europe, such poetry did not achieve high standing until the Romantic Age in the 18^th century. Confucius argued one central goal of poetry is political critique, even if vague or indirect. In Classical Chinese, one word typically corresponds to one syllable, which is written in one character. This intrinsic musicality makes lyrical poetry the natural choice.

Why did China neglect fiction? In Poetics, Aristotle says epic “agrees with tragedy” in being an imitation of serious action. In place of invented stories, the literate class has drawn upon China’s rich stock of historical stories of “serious action” for lessons on the human condition. These stories may be idealized, but not imaginary.

“Introduction”, The Cambridge History of Ancient China: From the Origins of Civilization to 221 BC (1999) by Michael Loewe and Edward L. Shaughnessy

In the Chinese tradition, the Western Zhou (1045–771 B.C.), the conqueror of and successor to Shang as the third of the Three Dynasties, was always regarded as China’s finest and most noble age. In comparison to Shang, it boasts a richer array of evidence, both textual and artifactual, on which the historian may call: bronze inscriptions, poetry, speeches by the rulers, as well as artifacts from sites throughout North China. By weaving all of these sources together, it is now becoming possible to show just how much has been left out of the traditional “dynastic cycle” model that focused almost exclusively on virtuous founders and evil last kings. Political rivalries now show through the cracks of the monolithic textual tradition, suggesting the first conflict between royal rule ordained by Heaven and government by worthy administrators — a conflict that would long beset China’s rulers. Poetry no less than bronze vessels tells the tale of a major reform of ritual practice that took place ca. 900 B.C., a reform that not only had broad implications for contemporary intellectual and social development, but that would continue to influence conceptions of social status for many centuries thereafter. Excavations at the capitals of the states of Jin 晉, Guo 虢, Lu 魯, and Yan 燕, all states established in the eastern part of the Zhou realm to serve Zhou interests there, are now suggesting how the multistate system of the Spring and Autumn period (770–481 B.C.) began to develop.

If the Western Zhou dynasty (1046–771 BCE) defined the cultural foundation of Imperial China, the Eastern Zhou dynasty (770–256 BCE) gave rise to its political foundation. In a classically preserved speech corroborated by modern archeology, King Wu, the founder of the Zhou dynasty, rallied his rebel armies by arguing tyrants had no right to rule. He and his successor reorganized and expanded China proper under a feudal kingdom. In the West, when Brutus deposed the last king of Rome for criminal conduct five centuries later, it was still a small city-state. King Wu was later memorialized as a paragon of kingship that later emperors are exhorted to emulate. The zongfa system, where the patriarch heads a family of one or more spouses and children ordered on seniority, solidified during the Western Zhou. It persisted until the 20^th century. Eschewing the previous dynasty’s emphasis on theocratic divinations, the Western Zhou elevated secular ancestral worship into the principal rite; the kingdom had no official clergy or theology to speak of. By 771 BCE, archeological and textual evidence shows the elite class, from the Yellow River down to the Yangtze, had assimilated into the Zhou-defined Chinese culture.

Presaging the Holy Roman Empire, intense inter-state competition during the Warring States period (475–221 BCE) ushered in tactical innovations, universal conscriptions, and the substitution of feudalism with centralized bureaucracy. By the reign of the first emperor (221–210 BCE), who unified all the Warring States, China had transformed into a post-religious, post-aristocratic centralized state, with strong cultural homogeneity. It taxed the population and drafted them into service without middlemen. Military command and administration are split apart and overseen by civilian officials, a principle adopted by the U.S. in 1986 and revived by the CCP in 2015. These fundamental features distinguish the Qin-Han Empire from the contemporaneous Roman Empire in all but size. Citing the incessant warfare, the first Chinese emperor refused to reinstate feudalism. Two millennia later, on the other side of Eurasia, trauma from the warring states brought about the semi-centralized European Union.

“Chapter 1: The Spirit of Chinese Philosophy”, A Short History of Chinese Philosophy (1948) by Yu-lan Fung

According to Confucianism, the daily task of dealing with social affairs in human relations is not something alien to the sage. Carrying on this task is the very essence of the development of the perfection of his personality. He performs it not only as a citizen of society, but also as a “citizen of the universe,” t’ien min [天民], as Mencius called it. He must be conscious of his being a citizen of the universe, otherwise his deeds would not have super-moral value. If he had the chance to become a king he would gladly serve the people, thus performing his duty both as a citizen of society, and as a citizen of the universe.

Since what is discussed in philosophy is the Tao (Way) of sageliness within and kingliness without [內聖外王], it follows that philosophy must be inseparable from political thought. Regardless of the differences between the schools of Chinese philosophy, the philosophy of every school represents, at the same time, its political thought. This does not mean that in the various schools of philosophy there are no metaphysics, no ethics, no logic. It means only that all these factors are connected with political thought in one way or another, just as Plato’s Republic represents his whole philosophy and at the same time is his political thought.

Although markedly weaker than its Western counterpart on logic and liberty, classical Chinese philosophy has a special focus on political economy on a civilizational scale, unconfined to a city- or nation-state. In the process, it developed a secular humanist worldview that predated European humanism by 1,500 years. Even Buddhism, the only major foreign philosophy in China before the Opium Wars, was secularized by the literati. Centered around the teachings of Confucius (551–479 BCE), it teaches an ideal society is built on hierarchical relations between the ruler and the bureaucrat, the father and the son, and the husband and the wife. The former are obligated to treat the latter justly. If the ruler fails to honor such duties, Mencius (c. 371–c. 289 BCE) says, he is no longer a true ruler and that an overthrow is warranted. Mencius, quoting the founder of the Zhou dynasty, stresses the mandate of heaven is reflected in the popular will, not in a divine being or his earthly priests as believed in feudal Europe and Japan. Far from a fringe thinker, Mencius was endorsed as the second highest sage teacher by the Chinese state from 1330 CE to 1911 CE. Except for Mao and Deng, all subsequent Chinese paramount leaders have spoken highly of him. In 2014, Xi Jinping quoted the founder of the Zhou dynasty through Mencius on the same point, in the exact words as recorded more than 2,200 years earlier.

Modern CCP ideologies have been borrowed from ancient Confucianism. Building a hexie shehui, or a harmonious society, added to the party platform in 2004, officially derives from Confucius’s sayings and the seminal Confucian text Zhongyong. Achieving xiaokang, or moderate prosperity, adopted as an official goal in 1982, is civilizational aim attributed to Confucius in the classic Liji and pursued by the emperor and the literati for millennia. The CCP talks about the Sinicization of Marxism and the promotion of fine traditional culture; in many ways it’s reversion to China’s Confucian tradition, which has proto-socialist features. In international relations, China’s non-expansionism (article here) can be traced back to the teachings of Confucius and Mencius criticizing grandiose conquest and advocating soft power. Both favored an inclusive cultural identity of China, not an exclusive racial one.

— Mao told the CCP Central Secretariat in 1956, before the Sino-Soviet Split

The key mistake commentators on China make is equating it with the Soviet Union. It’s misguided not only in China’s domestic policy, but in its foreign policy. Unlike Chinese domestic policy, where the U.S. and other countries have little influence, fundamentally misjudging Chinese foreign policy may invite great tragedies internationally.

The core difference between China and the U.S.S.R. in foreign policy is the former’s non-expansionism, which is deeply ingrained in Chinese culture and history. To careful observers, the evidence abounds.

The Sinocentric Foundation of the Classical Chinese State

A continental civilization, China largely reached its natural geographic limits with unification under the centralized Qin dynasty in 221 BCE. Bounded by the Pacific Ocean to the east and south, the Eurasian Steppe to the north, and the Tibetan and Yungui Plateaus to the west, China under the Han dynasty (202 BCE to 220 CE) adopted the pre-Qin Sinocentric worldview that the Chinese sovereign was the Son of Heaven, superior to all barbaric rulers outside China proper. Pre-modern Chinese national security thinking was preoccupied with internal stability and nomadic invaders. Instead of conquest or client control, China managed foreign relations via a tributary system entailing mere acknowledgment of the central position of the Chinese emperor in exchange for titles and gifts. Foreign rulers in the system were left to their own devices in foreign and domestic policy. From the Sinocentric perspective, dominating the world simply means dominating China.

What about Xinjiang and Tibet?

When Tibet and the tribes in Xinjiang were part of the tributary system under the Ming dynasty (1368 CE to 1644 CE), the final ethnic Chinese dynasty, China in keeping with precedents refrained from interference in their affairs. It all changed with the Manchu conquest of China from 1618 CE to 1683 CE. The only non-Chinese dynasty to rule China besides the Mongols, the Qing was the sole non-Mongol dynasty based in China to permanently annex Xinjiang and Tibet, after vanquishing their Mongol overlords in 1758 CE. Although the Manchu-led Qing monarchy lost its native language before its fall, they never identified as ethnic Chinese and departed from Chinese customs in major areas.

Is Modern China Different?

The tributary system was shattered by the Qing’s humiliating defeats in the Opium Wars (1839 CE to 1860 CE). At long last, China was forced to treat other countries as equals and clearly demarcate its borders. At the same time, Chinese national security thinking shifted overnight to the defense of its preexisting territory from foreign imperialism, chiefly Tsarist Russia and Imperial Japan. Historically fuzzy borders aside, especially between India and Qing Tibet and Xinjiang, China has made no new territorial claims on the Asian mainland or created a client state since the Opium Wars. On the contrary, the People’s Republic of China has always claimed a smaller territory than either the Qing or the Republic of China.

The Novelty of Maritime Disputes

Chinese claims on the Spratly, Paracel and Senkaku Islands are frequently cited as evidence of expansionism. Such a view overlooks the ambiguity of historical sovereignty over uninhabited rocks and the lack of traditional international law in the East and South China Seas. North Vietnam once accepted China’s claims before reneging, while the Philippines did not contest them until decades after the claims were announced in 1948.

Whatever the claims, since ratifying UNCLOS in 1996, China has not blocked trade flows in the South China Sea or used deadly force to challenge the other claimants’ effective control.

The Extreme Non-Interventionism of Contemporary Chinese Foreign Policy

Chinese non-expansionism has endured since the communist takeover in 1949. Even Mao, a fervent believer in worldwide revolution who harshly denounced Khrushchev for proposing peaceful coexistence with capitalism, only pushed for one major intervention, the Chinese entry into the Korean War. According to leading Korean War expert Shen Zhihua’s research, after U.S. forces crossed into North Korea, Mao was almost alone in the politburo in insisting on sending Chinese troops. Yet, China has never tried to turn North Korea into a satellite.

Upon his death in 1976, the CCP leadership was nearly unanimous in jettisoning Mao’s radicalism. In foreign affairs, it has adopted extreme non-interventionism.

· China has only one treaty ally, North Korea, a Maoist legacy.

· China has no client state.

· China has only one military base abroad, in the Horn of Africa.

· The Chinese air force has never seen action since the Korean War, when it was utterly primitive. It was held back to limit the brief border conflicts with India and Vietnam.

· China promises no first use of nuclear weapons, the only member on the U.N. Security Council to do so.

· China under the CCP never attempted to reconquer Mongolia, formerly part of the Qing and the Republic of China.

· China never attempted to invade Portuguese Macau, when Portugal was unable to mount a defense.

· China has refused to supply Russia with weapons and criticized Putin’s nuclear threats in the grinding war with Ukraine.

· The question of Taiwan poses real risks, but in opposing separatism China prioritizes appearances over substances. (The Taiwan question is complex and explored in depth on this blog here.)

Could one imagine how unstable the world would be if China emulated the foreign adventurism of Russia or Iran?

A Call for a Broader Perspective on History and Culture

Well-trained in Thucydides and nostalgic for the Concert of Europe, international relations thinkers in America are trying to apply the lessons to the rejuvenated superpower in the East. However, a balance of power framework developed based on classical Greek and modern European history is ill-suited for East Asia; far too many struggle to comprehend historical and cultural knowledge considered rudimentary in China and its neighbors. During the Cold War, Russia experts in the West were fluent in Russian history and culture. How many “China experts” today could claim the same?

As Henry Kissinger noted in 2005, “[t]he Chinese state in its present dimensions has existed substantially for 2,000 years. The Russian empire was governed by force; the Chinese empire by cultural conformity”. A purely realist analysis of China’s rise neglects its ancient Confucian foundation, in many ways the polar opposite of erstwhile Russian or Japanese expansionism. Such unique traditions profoundly shape its grand strategies still to this day.

— Cao Cao (155 CE–220 CE), the de facto ruler of Northern China, stressing the importance of attracting the best

What is a country’s greatest asset? It is its people. Which of them deliver outsized impact? It is its elite talents. The crème de la crème build companies, generate knowledge, and strengthen institutions. In various ways, they determine the fortune of a country.

In the community of nations, China is in the unique position of possessing by far the largest share of top global talents. Yet they are underutilized, with many failing to reach their potential in the home country. How China may leverage this asset, and how America could tap into it, will shape the trajectory of this century and beyond.

More than Half of Geniuses Worldwide

The definition of elite talents is multidimensional, but intelligence is invariably the central feature. It is often measured indirectly via academic tests or university degrees. Mensa International restricts its membership to those in the top 2%, equivalent to an IQ of 132. For context, MIT undergraduates have a median IQ of about 129, per their SAT scores and a straightforward conversion method. This essay defines a genius as someone with an IQ of 135 or above. It corresponds to the top 1% in a normal distribution with an average of 100 and a standard deviation of 15, the standard assumption for IQ distribution.

In reality, the worldwide distribution has a lower mean. Psychologist David Becker’s 2023 NIQ dataset shows a global average of 86. Assuming a normal distribution with a standard deviation of 15 for each country and territory, it yields a global genius pool of 36 million, equal to 0.5% of humanity. His painstaking per-country IQ estimates build upon a 2019 book coauthored with Richard Lynn. Their datasets are the best available. For all the controversy surrounding IQ research, it remains a highly valuable and predictive metric, especially in cross-country comparisons.

How many of the 36 million geniuses are in China? From Becker’s dataset, China has an average IQ of 103, notably higher than the global mean of 86. It translates into a gargantuan difference at the tail, giving us 22 million Chinese with an IQ above 135. With this simple calculation, we arrive at the assessment that China alone represents 61% of geniuses worldwide. In this sense, it confirms the stereotype that Chinese are a smart nation.

Contrast with India

Comparable in population, India is often viewed as a poorer and freer China. Such a simplistic view overlooks vast differences, chief among them the gulf in human capital. India’s mean IQ has fluctuated around 80 in the 21^st century, despite long-running government efforts at better schooling. Becker’s data implies, with a mean of 76 and assuming a normal distribution with a standard deviation of 15, there are only 55,000 people with an IQ of 135 or above in India. In other words, Chinese geniuses outnumber Indian geniuses by a factor of 400 to 1. Constructed school achievement scores in India are about 1.7 standard deviations below China’s, in line with the intelligence gap. Even if this IQ estimate is biased toward China by an order of magnitude, the top end of Chinese human capital still dwarfs India’s.

Can it be fixed via improved nutrition and sanitation? Indian height trends suggest lack of progress after decades of public health intervention. Child and adolescent statures have barely budged in a decade, and for some groups they have even slipped. The Indian government’s NFHS-3, NFHS-4, and NFHS-5 surveys show that the average height of men aged 20–24 declined by roughly 2 cm from 2005-06 to 2019-21.

Whether the causes are cultural or otherwise, the stagnant height and IQ data indicates the problem of low human capital is deeply entrenched in India.

What about Culture?

Despite their conformity and reserve, the Chinese people carry a strong Confucian tradition of conscientiousness and pragmatism. On the whole, they contribute to culture, not detract from it.

From the classroom to the workplace, Chinese are dedicated. In PISA 2015, students from Beijing, Shanghai, Jiangsu, and Guangdong reported 55 study hours per week, the second highest globally. According to the Penn World Table, the average Chinese worker spends 42 hours per week on the job. By comparison, the average in the EU is 36 hours. The International Labour Organization’s cross-country survey work finds “over 40% of workers in China work more than 48 hours per week”, a particularly high share by global standards; the EU’s share is merely 15%.

Pragmatism is an underrated cultural trait, where Chinese excel. In the World Values Survey, China ranks as one of the least religious countries in the world, on par with Scandinavia. Whereas the decline of Christianity in the West is giving rise to secular dogmas, Chinese shun extreme ideologies: they are committed to free market, while eschewing novel views on race and gender; climate disaster or AI doom, however emotionally seductive, doesn’t resonate with them.

Empirical studies highlight the contribution of Chinese immigrant culture. In The Culture Transplant (2022), economist Garett Jones examines the Chinese diaspora in Southeast Asia. He found places with a higher share of ethnic Chinese tend to be richer and have more market-friendly governance with lower corruption. This dovetails with the classic ethnic-Chinese network literature showing big trade boosts where Chinese networks are thicker.

Last but not least, China’s murder rate is 9% of America’s, consistent with other East Asian countries.

Talents Squandered in China

Unfortunately, China is not making the best use of its geniuses.

From Grade 1 to 12, Chinese students must pass through an intensely exam-centric and rigid education system. It culminates in the famously competitive Gaokao, or the national university entrance exam. Unlike the U.S., where the best high-school students take advanced placement courses and universities set different admissions standards, China places students into universities almost entirely through Gaokao. There is almost no room for the best students to take university-level courses early or distinguish themselves in admissions in other ways. Large emphasis is placed on memorizing classical texts, handwriting, and manual calculation. Exams are frequent and students are highly conscious of their rankings. As a result, sharp young minds are confined to a schooling system that not only is highly stressful, but imparts limited useful learning. Under Xi Jinping, the education system grew even less dynamic — curriculums became more centralized, minor admissions discretion of prestigious universities was rolled back, and international schools have been heavily curtailed.

Second, a large fraction of top Chinese graduates are absorbed into the civil service or state-owned companies, which are the least productive parts of the economy. In 2024, the central civil service exam raised the bar of registration to a tertiary degree in response to rising demand. The acceptance rate fell to a historic low of 1 in 86. In 2021, 47% of Tsinghua graduates chose the public sector. In so doing, they are largely motivated not by the desire to serve, but by state-guaranteed job security and fringe benefits. This phenomenon has been exacerbated by COVID and the long-run slowdown of the Chinese economy. Under Xi Jinping’s reorientation of the economy from market to party, the private sector is increasingly less attractive to fresh graduates. Even in entrepreneurship, the natural home for the most productive members of society, there has been a crash in venture capital funding and startup formation since 2018. Unsurprisingly, researchers find those who score higher in Gaokao are less likely to start a business and more likely to join the state sector.

Whither America?

The difficulty of legally immigrating to the U.S. has been well documented — the U.S. has long had the most restrictive skilled immigration pathways in the Anglosphere. To illustrate the absurdity: even a Chinese PhD graduate in computer science from Stanford is unable to obtain a green card automatically. Making the matter worse, the 7% per-country cap set by Congress means Chinese talents face a much longer wait time than almost all other countries’ in the immigration system.

Chinese immigrants have already shined in America despite the folly of the system. In 2024 and 2025, 4 out of the 6 members on the American teams in the International Math Olympiad have a Chinese last name. In 2022, 38% of top-tier AI researchers in the U.S. hail from Chinese universities. All the above has been achieved by a minority accounting for only 1.6% of the U.S. population.

National security is frequently cited by both parties as a rationale to limit Chinese immigration. In 2020, the Director of National Intelligence named China “the greatest threat to America today”. It was echoed later by the Biden administration. Labels aside, what is the scale of the problem? From 2018 to 2022, the U.S. Department of Justice ran an expansive program called the China Initiative to root out Chinese spies. By its own tally in 2024, only 16 China-related cases were brought after the start of the program. Similarly, a 2021 analysis by MIT Technology Review determined that just 19 of the 77 China Initiative successes involved economic espionage or IP theft. In espionage, China relies overwhelmingly on cyber capabilities, not human assets. With the internet, immigration restriction in the name of national security is increasingly irrelevant.

There is undoubtedly strong demand from Chinese youth to live and work in America. Until the pandemic, Chinese students were the largest international student cohort. Hundreds of thousands still come to the U.S. to pursue higher education, bearing high tuition and living costs. Many see it as a bridge to their American dreams. The Migration Policy Institute’s survey finds 42% of Chinese graduate students plan to obtain a green card. Among the general population, the U.S. is viewed as one of the most desirable countries to migrate to.

The U.S. used to be more proactive in attracting Chinese talents. In the aftermath of the Chinese Civil War, the U.S. funded the quasi-official nonprofit Aid Refugee Chinese Intellectuals, to resettle educated Chinese fleeing from the Communist Party. It eventually helped 2,350 Chinese move to the U.S. after national security reviews. As one director wrote to a senior staffer, “we all want to have the best type of Chinese resettling here.” In the wake of the Tiananmen Square Incident, the U.S. passed the Chinese Student Protection Act. 54,000 Chinese students obtained green cards as a result. However, in a sign of a changing American mindset, the act requires subsequent Chinese green card quotas be reduced to offset the additions.

It’s hard to exaggerate the potential of opening up the system to more Chinese talents. Standard estimates suggest the U.S. has 3.4 million with an IQ above 135. With the enormous scale of China, merely importing 5% of Chinese geniuses would enlarge the U.S. pool by 32%. If the U.S. is serious about competing with China, it should stop forfeiting the most effective strategy — bringing in China’s best and brightest. A simple policy of granting green cards to STEM graduates from world-leading universities would go a long way. The U.K. already has such a policy in place.

Conclusion

During the Cold War with the U.S.S.R., the U.S. welcomed Soviet talents with open arms; emigration restriction was the bottleneck. Fast forward to today, in the grand competition with China, America is doing the opposite, even though China is not limiting talent outflows.

Like the Soviet Union of old, China is not unleashing the enormous potential of its people. It is sitting on a gold mine, ripe for the taking. In many ways, the outcome of the superpower rivalry hinges on the 22 million Chinese geniuses. America is blessed with being the unmatched talent magnet in the world. It would be a shame to waste it.

— Carl von Clausewitz (1780-1831)

If World War III were to break out, it would be between the U.S. and China. If the U.S. and China were to go to war, it would be over Taiwan. Taiwan has been the most contentious issue in China-U.S. relations since diplomatic ties were established in 1979. It is the most serious security flash point in the world.

What should the world know about this potential catastrophe? How should the U.S. leverage its might to maintain peace across the Taiwan Strait?

(This article uses the shorthands “China” to refer to the People’s Republic of China which controls mainland China, and “Taiwan” to refer to the Republic of China which controls the island of Taiwan. This author takes no position on whether Taiwan is or should be an independent country.)

Historical Background

Like many geopolitical disputes in East Asia, the Taiwan question is deeply rooted in history.

Originally inhabited by Austronesian populations, Taiwan was annexed by the Qing dynasty in 1683 and became predominantly Chinese due to migration from the mainland in the 18^th century. It was ceded to Japan after the Qing lost the First Sino-Japanese War in 1895. Once Japan surrendered in 1945, Taiwan was returned to the Republic of China. However, the Nationalist-led Republic soon lost the mainland to the Chinese Communist Party in 1949 in a bloody civil war.

From this point onward, the Republic of China only controlled the island of Taiwan and several minor islands, leading to a gradual loss of diplomatic recognition. It ultimately lost its UN membership in 1971, when the General Assembly voted to recognize the People’s Republic of China as “the only legitimate representative of China”. Even its long-time ally America withdrew recognition and terminated the mutual defense treaty in 1978. Today, only 11 UN member states recognize the Republic of China.

Taiwan transitioned to a multiparty democracy in the 1990s, when the Nationalists ended the civil war emergency and relinquished its monopoly on power. The Democratic Progressive Party emerged as the main alternative, rooted in Taiwanese nativism. Nonetheless, the Republic of China, commonly referred to as simply Taiwan, has always claimed all of China as its constitutional territory. Meanwhile, Mandarin is the lingua franca of both Taiwan and China.

Deep economic ties developed between Taiwan and China, especially in technology. TSMC, Foxconn, and MediaTek, Taiwan’s three largest technology firms, are intimately linked to China. In 2010, 80% of Taiwan’s foreign direct investment was made in China. In 2020, 44% of Taiwan’s exports went to China. Recent economic diversification notwithstanding, Taiwanese visited mainland China four million times in 2024.

America’s Position and Thinking on Taiwan

Since the U.S. switched diplomatic recognition from Taiwan to China, it has upheld the one-China policy, a core demand of the CCP. This policy is based on the Taiwan Relations Act, the three U.S.-China joint communiques, and the Six Assurances. Although the U.S. has neither military presence in Taiwan nor treaty obligation to defend the island, it is Taiwan’s only major military backer, bolstering it with weapons and advice.

The one-China policy of the US differs from China’s one-China principle — China claims Taiwan as part of the People’s Republic of China, which the U.S. does not recognize. The U.S. formally treats Taiwan’s political status as undetermined. It opposes both a Communist invasion of Taiwan and formal Taiwanese independence; yet the former commands much more attention and effort in the U.S. than the latter.

Making the world safe for democracies, first articulated by Woodrow Wilson, remains one of the fundamental motivations for American foreign policy, shared by both the elite and the public. From a realist lens, Taiwan’s dominance in advanced semiconductor fabrication puts it at the center of American technology supply chains. At present, almost all of Nvidia’s and Apple’s highest-end chips, Blackwells for LLM training and Apple Silicon for iPhones, are made in Taiwan.

China’s Position and Thinking on Taiwan

Since the death of Mao in 1976, the Communist Party has preferred peaceful reunification while strongly rejecting Taiwan independence. The proposed solution has been “one country, two systems”, where China promises autonomy in exchange for Taiwan’s acceptance that it’s part of the People’s Republic of China. China has gone so far as to offer Taiwan a continued independent military as a special region of the country. The threat of force is designed to deter independence and American military presence.

In the post-Mao era, the ideology of the CCP has been shifting away from Marxism-Maoism toward nationalism. Eschewing Mao’s emphasis on eradicating free markets and fomenting worldwide revolution, the party-state formally adopted the mantra the “Great Rejuvenation of the Chinese Nation” in 2002. It’s the core message propagated to the people by party media daily, occasionally framed as the “Sinicization of Marxism”. The CCP justifies its legitimacy by presenting itself as the guardian of the Chinese civilization. Central to the legitimacy claim is the eventual reunification of Taiwan with the mainland. Under Xi Jinping, the shift has only accelerated.

As a result, China tries to extinguish hints of international legitimacy for Taiwan, such as formal membership in international organizations or official visits involving world leaders. In the World Trade Organization and the Olympics, Taiwan participates as “Chinese Taipei”. When Speaker Nancy Pelosi visited Taiwan in 2022, China launched the largest military exercise around Taiwan in history, as protest and deterrence.

Rising Taiwanese Nationalism and Taiwanese Politics

Despite its ethnic Chinese nature and strong economic relations, the Taiwanese people have moved away from identifying as Chinese and toward favoring independence. According to two long-running surveys by the National Chengchi University in Taiwan, the percentage who identify as Chinese collapsed from 71.9% in 1992 to 32.8% in 2025, and support for independence rose from 11.1% in 1994 to 25.8% in 2025. Only 6.4% favor reunification, down from 20% in 1994, while more than 87.9% wish to keep the status quo for now, near all-time high.

Responding to voter sentiments, both major parties in Taiwan — the pro-reunification Chinese Nationalist Party and the pro-independence Democratic Progressive Party — have chosen to largely maintain the status quo. On the one hand, Taiwanese public opinion makes peaceful reunification highly unlikely. On the other hand, the invasion threat appears to have solidified the public support for the status quo for the time being.

Major differences between the two parties persist.

The Democratic Progressive Party insists Taiwan and China are separate countries. The DPP’s pledge to a Republic of Taiwan in its party platform remains a thorn in the CCP’s flesh. The refusal of DPP presidents to negotiate reunification or deeper trade ties with China has led to a freeze in dialogue and sanctions from China. Lai Ching-te, the new president of Taiwan from the DPP, is a self-avowed champion of Taiwan independence. Despite recent pledges to keep the status quo, Lai called for a new constitution for Taiwan in 2019, shortly after his tenure as prime minister. The first DPP president, Chen Shui-bian, advocated for a Republic of Taiwan while in office in 2007, breaking his key promise.

The Chinese Nationalist Party has a different philosophy. It views mainland China and Taiwan as one country. Even though it has never accepted “one country, two systems”, it gravitates toward dialogue and economic integration with China. When President Ma Ying-jeou from the CNP was in power from 2008 to 2016, the relationship was stable and a major trade agreement was ratified, despite no political concessions of substance. As a sign of détente, China allowed Taiwan observer status in the WHO from 2009 through 2016 as “Chinese Taipei”.

Taiwan’s Direct Democracy and Constitutional Framework

Under Taiwan’s referendum law first adopted by the legislature in 2003, 1.5% of the electorate is sufficient to initiate a plebiscite, which passes if yes votes represent more than 25% of eligible voters. The legislature, controlled by the DPP, lowered the threshold for passage in 2017 and may continue to do so. For a constitutional amendment, consent from 75% of the legislature and more than 50% of eligible voters is required. Formal independence entails a constitutional amendment to amend the official name, territory, and anthem of the country. In this case, the legislature may not lower the threshold unilaterally, which requires a constitutional amendment in the first place.

A non-constitutional referendum has become the critical conduit for populist proposals for Taiwanese independence. In 2008, independence activists, with the endorsement of President Chen from the DPP, initiated a referendum on applying for UN membership as “Taiwan”. In 2020, they initiated a similar referendum to apply to participate in the Olympics as “Taiwan”. With China holding a veto in the Security Council and wielding significant influence on the International Olympic Committee, neither proposal was ever realistic. In the end, both referendums failed to pass but signaled the brinksmanship of the independence movement. Either would have unnecessarily provoked China and invited economic if not military retaliation. In practice, Taiwan already enjoys independence, free to enter into bilateral agreements and issue passports. But for Taiwanese ultranationalists, it’s not enough.

When it comes to reunifying Taiwan, China cares much more about appearance than substance. International recognition of “Taiwan” is the battleground. A constitutional amendment changing the official name from the Republic of China to the Republic of Taiwan is the public redline for the CCP.

Shifting Balance of Power

An uneasy peace has survived for decades mostly because of mutual deterrence between China and the U.S. It is being rapidly eroded by the rise of China.

Unlike Israel, Taiwan doesn’t have nuclear weapons. Unlike Ukraine, Taiwan doesn’t have strategic depth and can’t be easily supplied in war. Only U.S. military intervention can save Taiwan in the event of an invasion.

The gap between the Chinese and U.S. militaries has been narrowing since China’s economy took off four decades ago. After adjusting for purchasing power, China’s military spending reaches 541 billion dollars, 59% of the U.S. figure. The U.S. armed forces cover the globe, while the People’s Liberation Army’s top priority is Taiwan. When the PLA first took over mainland China, it had no navy to speak of. Seven decades of buildup later, China has a larger navy than America. Furthermore, according to disclosed U.S. intelligence, the CCP plans to have the capability to defeat the U.S. in a war over Taiwan for the first time by 2027.

Taiwan’s Lukewarm Commitment to Defense

Official rhetoric aside, Taiwan has shown limited willingness to defend itself. According to the Stockholm International Peace Research Institute, Taiwan’s military spending never exceeded 2% of GDP from 2010 to 2022. It reached 2.2% in 2023 and fell to 2.1% in 2024. In addition, it slowly cut mandatory military service for men from two years from before 2000 to four months. Only in 2022 did it reverse course, only raising it back to one year. In contrast, South Korea, with U.S. troops protecting its borders, imposes 18 months of service or more on male citizens. In energy security, Taiwan shut down its last nuclear power plant in 2025, becoming dependent on imported fossil fuels, which could be easily cut off by China.

The policies reflect Taiwan’s lack of will to fight. Indeed U.S. intervention couldn’t protect Taiwan if it’s unwilling to defend itself. Such unseriousness from Taiwan signals weakened deterrence to China.

Dubious Political Will in the U.S.

In recent decades, major U.S. military casualties abroad have triggered intense domestic backlash. After the Battle of Mogadishu killed 18 U.S. servicemen, the U.S. withdrew from Somalia. The deaths in Iraq and Afghanistan have contributed to the ascent of national conservatism in the Republican Party, which is inward-looking and highly skeptical of foreign entanglement risking U.S. lives. Credible polling data bears this out — 36% of Americans would support an intervention to stop China, down from 40% in 2022. Crucially, it may well be an overestimate. A 2023 CSIS war game projects 3,200 U.S. troops will die defending Taiwan within one month should the U.S. intervene. The U.S. has not had such sudden massive casualties since the Korean War.

Unless China is foolish enough to strike Guam or American forces in Japan first, it’s doubtful a U.S. president will come to Taiwan’s rescue and suffer the political cost. With TSMC starting to manufacture cutting-edge chips in the U.S., the benefit for the U.S. is shrinking, the cost ballooning. This changing political reality likewise signals weakened deterrence to China.

America at a Crossroads

The U.S. now faces a historic choice. To continue to safeguard peace in the Taiwan Strait, it may pursue either dual deterrence, or total abandonment. Both options are superior to the current approach and secure peace for the long run.

Option A: dual deterrence

U.S. military bases in Japan are essential for a successful intervention. The U.S.–Japan Security Treaty allows U.S. forces to use their bases “for the maintenance of international peace and security in the Far East”. Nonetheless, the U.S. has promised in diplomatic notes to “consult” Japan before using them to defend other countries. America may urge Japan to pass a law to give the U.S. explicit prior approval to use military bases in Japan to protect Taiwan and other key areas in East Asia. The U.S. president may publicly support amending Japan’s U.S.-imposed constitution to have a full-fledged military, despite certain objections from China and South Korea. A stronger and more engaged Japan would strengthen deterrence.

Further, the U.S. needs to put deterring independence on an equal footing as deterring invasion.

The American president may make it explicit that formal independence would mean no U.S. intervention and urge the Democratic Progressive Party to amend its platform to remove the goal of a Republic of Taiwan. Threat of arms cutoff may be used. This may be paired with concessions from China, such as decreased military activities around Taiwan, ceasing attempts to pry away Taiwan’s diplomatic relations, and support for Taiwan’s international participation as “Chinese Taipei” or “Chinese Taiwan”. Concerns about interfering in Taiwanese politics should be superseded by the Israeli precedents. It would deter a pro-independence Taiwanese president from endorsing another referendum on formal independence or declaring a new country unilaterally. The U.S. president could also announce a policy to oppose Taiwan’s efforts to join international organizations under the sole name “Taiwan”. The U.S. may arrange a peace treaty negotiation to formally end the Chinese Civil War between the PLA and the ROC Armed Forces, without touching on reunification or independence. It’s long desired by the CCP and would stabilize the relationship.

Option B: complete abandonment

An announcement from the U.S. president to abandon Taiwan militarily would crush the morale of the Taiwan independence movement. It could be coupled with deep concessions from China in major areas, including the South China Sea, and the East China Sea, cyber espionage, North Korea, and trade. At worst, it would pave the way for a peaceful takeover of Taiwan by China. Conversely, a treaty ratified by the Senate to defend Taiwan would plausibly spark an immediate invasion by forcing the CCP to defend its credibility and legitimacy. Such a grand bargain continues to be less politically feasible than Option A, given public and Congressional support for Taiwan.

Coda

76 years after the Communist victory in the Chinese Civil War, Taiwan is a prosperous democracy with an increasingly independent identity. An intricate peace has been sustained for generations, based on ambiguous sovereignty and interlocking deterrence. Currently, it is being threatened from all sides. With enough wisdom and courage, we can preserve the status quo and avert a future conflict.

— Su Shi in 1084 CE bemoaning the complexity of Mount Lu in Eastern China

An ancient civilization starting anew, China remains poorly understood by the world. Superficial resemblance to the Soviet Union masks its complex history, distinctive culture, and hybrid economy. Yet the importance of getting China right can hardly be overstated.

Below are the six foundational books for the intelligent and curious who wish to begin understanding China. In this author’s opinion, they serve as the necessary steppingstone for in-depth appreciation.

(This author has no affiliation with any of the writers or publishers. They are recommended solely based on merit.)

Deng Xiaoping and the Transformation of China (2011) by Ezra Vogel

The rapid transformation of China from Maoist deprivation to a middle-income superpower has been nothing short of a miracle. The one person most responsible is Deng Xiaoping, the second paramount leader of Red China. Nevertheless, the world lacked an excellent biography of Deng until Vogel’s text was published in 2011. Nominally a biography, it’s a comprehensive history of the Deng era (1978–1992) in China, with occasional rosy views on the titular character. From upper middle-class origins in rural Southwestern China, Deng joined the Chinese Communist Party early on. He rose through the hierarchy owing to his administrative and military prowess, eventually becoming the general secretary of the party under Mao in 1956. Gradually, we see in the book his pragmatism clashing with Mao’s radical ideas, leading to him being purged twice during the Cultural Revolution. After Mao’s death, Deng quickly sidelined Mao’s inexperienced heir, unleashing what became known as Gaigekaifang, or Reform and Opening Up.

Unlike countries in the Soviet Bloc, whose later economic reforms led to the downfall of Communist rule, the CCP under Deng and other party elders successfully fused the free market with one-party supremacy, for both practical and ideological reasons. After the Tiananmen Square Incident and the collapse of the USSR, the general secretary of the party named by Deng began curtailing economic reform, fearing it was undermining political security. Deng, 87 and no longer holding any official position, embarked on his storied Southern Tour to reignite market liberalization. “Whoever refuses to carry out reform will have to step down”, Deng told senior military commanders at a meeting in Zhuhai in Southern China. Jiang Zemin, the wavering general secretary, soon pivoted and put China back on the path of Reform and Opening Up, securing Deng’s legacy. Nonetheless, the tension between economic freedom and political security was never fully resolved.

Quote of the book: “If there is one leader to whom most Chinese people express gratitude for improvements in their daily lives, it is Deng Xiaoping. Did any other leader in the twentieth century do more to improve the lives of so many? Did any other twentieth-century leader have such a large and lasting influence on world history?”

1587, a Year of No Significance (1981) by Ray Huang

Sarcastically titled, 1587 remains the finest book on Chinese history ever written. Huang, having come of age in Central China and fought in WWII against Japan, drew on his encyclopedic knowledge on pre-modern China to paint a detailed picture of the country in 1587 CE. He convincingly demonstrates the institutional ossification of the Ming dynasty, attributing it to causes deeply rooted in the Chinese tradition. It stifled not only novel ideas and culture, but fiscal and military reforms needed to counter the invasion threat from beyond the Great Wall. Ultimately, the volume foreshadows the Ming dynasty’s fall to northern invaders and peasant rebellion, and the long-term decline of China vis-à-vis the West and Japan.

The great divergence in economic performance, between China and the West or Japan since the dawn of the Industrial Revolution, has perennially puzzled intellectuals worldwide. Many answers have been proposed, ranging from natural resources (Kenneth Pomeranz and Robert Allen), institutions (Daron Acemoglu and Douglas North), culture (David Landes and Joel Mokyr), geography (Jared Diamond), and demographics (Gregory Clark), to even the Black Death (Hans-Joachim Voth). The institutional explanation remains the most compelling, however. As the great Adam Smith observed in The Wealth of Nations, “China seems to have been long stationary, and had, probably, long ago acquired that full complement of riches which is consistent with the nature of its laws and institutions”. A country that has reached this plateau, he explains, can “advance no further”. In the institutional context, qualitative evidence is crucial but often ignored.

Quote of the book: “The year 1587 [CE] may seem to be insignificant; nevertheless, it’s evident that by that time the limit for the Ming dynasty had already been reached. It no longer mattered whether the ruler was conscientious or irresponsible, whether his chief councilor was enterprising or conformist, whether the generals were resourceful or incompetent, whether the civil officials were honest or corrupt, or whether the leading thinkers were radical or conservative — in the end they all failed to reach fulfillment. Thus our story has a sad conclusion.”

The Rise of Modern China, 6th Edition (1999) by Immanuel C. Y. Hsu

For a country as consequential as China, its modern history is surprisingly under-researched and under-appreciated. Why did Imperial China fail to industrialize? Why was Republican China too weak to resist its much smaller neighbor Japan? How did the Nationalist Party lose the civil war to the Communists? How was Mao ruling China before he died? Although the book doesn’t address these vital questions in full, it offers an impressive overview. A native of Shanghai, Hsu rose to the challenge of summarizing probably the most complicated modern history of any country. It’s thorough without drowning the reader in details.

The aforementioned historical questions cast a long shadow even today. The ethnic tensions in Xinjiang and Tibet can be traced back to the Qing dynasty. The CCP’s swift victory over the Nationalists is intimately linked to Japan’s invasion of China. Taiwan, the most serious security flashpoint in the world today, is a product of the Chinese Civil War. Last but not least, Mao’s regime, despite its enormously destructive nature, laid the political foundation of today’s China. It’s hard to have a decent understanding of China without wrestling with these basic questions.

Quote of the book: “In ancient times, the Sinitic civilization reigned supreme in East Asia, and the Greco-Roman, Judeo-Christian civilizations flourished in the West. Each lived in splendid isolation without knowing much of the other. Truly East was East and West was West, the twain did not meet. Today the world is a global village.”

Prisoner of the State: The Secret Journal of Premier Zhao Ziyang (2009) by Zhao Ziyang

The Tiananmen Square Incident remains a watershed moment in modern Chinese history. Icons from the incident became world-famous, such as the Goddess of Democracy statue on the Tiananmen Square. Yet General Secretary Zhao Ziyang, who opposed the crackdown and spent the rest of his life under house arrest as a result, remains obscure. Based on recordings of conversations between Zhao and sympathetic friends after his purge, it serves as an extraordinary insider account from China’s would-be Gorbachev.

Due to the CCP’s opacity, this oral history serves as the best single source on the innerworkings of the party after Mao. For example, we get a detailed picture from the book of how heavily the CCP leadership depends on informal institutions and personal networks. Official party rules are often ignored, while formal meetings and documents serve as a rubber stamp for pre-approved decisions and messages. Senior party leaders communicate by private letters, and political patronage is usually necessary for high-level promotions. Intra-party differences sometimes rear their heads in conflicting party media editorials, but they are settled promptly by consensus or the supreme leader. The clash between orthodoxy ideology and pragmatic reform takes place both between factions and within individuals. By and large, they care deeply about both the future of the Chinese people and the future of the Communist Party.

Quote of the book: “When he [Deng Xiaoping] suggested he retire [in 1989 before the Tiananmen Square Incident], I [Zhao Ziyang] firmly disagreed. I said, ‘With the economic problems we are now encountering, people are talking. If you retire completely, it will be very difficult for us to manage. Politics in the East differs from the West; here in the East, your retirement would not stop the interference, nor would the fact that they no longer held any official positions. As long as these heroic founders of the nation are still alive, it will be impossible to persuade them to stop interfering in state affairs. If you were to stop intervening, but they continued to, it would be even more difficult for us to manage. With you in charge, it is still easier for us to get things done.’”

The State Strikes Back (2019) by Nicholas Lardy

The central question on the Chinese economy is why growth is slowing down. Once an envy of the world, China’s official growth rate began falling precipitously not long ago, from 14.1% in 2007 to 5.0% in 2024. Even though China overtook the U.S. as the largest economy in purchasing power parity in 2014, on a per-person basis China remains only half as rich as Japan or South Korea. Lardy, one of the foremost experts on the Chinese economy, offers a simple yet powerful answer — state-owned enterprises. Specifically, he shows the Communist Party’s failure to further reform the gigantic and inefficient SOE sector is the main drag on growth.

When Mao died in 1976, the entire Chinese economy was essentially one gargantuan state-owned enterprise. As a consequence, the economy teetered on the brink of collapse, with widespread malnourishment. After the private sector was reborn, the economy began taking off, with the SOE sector shrinking to a smaller and smaller slice. By the time Xi Jinping came to power in 2012, the text says their share of total output had fallen to about 30%. Instead of deepening previous reform to reduce their role, however, Xi reversed course by reemphasizing SOEs. His policies include re-directing bank credit, consolidating SOE national champions, and preferential regulatory enforcement. Despite efforts to improve SOE performance, a wide gap in efficiency persists. In industry, SOEs had only 26% the return on assets of private firms in 2016. Pragmatic reform blueprints for SOEs from the World Bank and domestic advisors went unheeded.

Quote of the book: “The large and growing gap in the economic and financial performance of private and state firms reflects the superior management of the former and the failure of banks, almost entirely state-owned, to impose hard budget constraints on money-losing state-owned enterprises. Private firms attempt to maximize profits and returns on assets while managers of many state companies appear to be asset maximizers, borrowing ever larger amounts to expand their businesses even if the returns do not cover the cost of capital.”

How China Works: An Introduction to China’s State-Led Economic Development (2024) by Lan Xiaohuan

Officially, China has been a “socialist market economy” for decades. Historically an oxymoron, the Communist Party appears to have made it work. What does it mean in practice? What role does the party-state still play in the economy? To answer these questions, economics professor Lan Xiaohuan at Fudan University in Shanghai has written a terrific primer. The book starts from government interventions like land-dependent public finance, local industrial policy, and currency-based exports, to the distortions they generate, including steep housing prices, toxic local government debt, underconsumption, and trade tensions. First published in China in 2021 to critical acclaim, it was released in English in 2024.

Despite its unprecedented success, the heavy state involvement in the economy has created serious and entrenched pathologies, hampering future growth. Recognizing the problems, Xi Jinping has chosen the solution of more visible hands of the party, not fewer. It has in turn exacerbated existing issues, and created new ones. To tackle unaffordable housing, instead of supplying more residential land, the government has imposed borrowing limits that bankrupted leading private developers. To handle industrial overcapacity, rather than withdrawing state subsidies, the party has relied on fiats and quotas. To address troubled shadow city loans, in place of removing implicit government guarantees, the state has rolled them over. To mitigate the trade war, in lieu of lowering China’s trade barriers, the country has focused on retaliation. The list continues. All in all, the socialist market economy has grown increasingly socialist in the past decade.

Quote of the book: “If we go back to 1980, even the most ardent promoters of the market economy then would be hard-pressed to imagine the depth and breadth of subsequent reforms. This book tries to introduce specific practices in the process of China’s economic development, which is obviously not a set of models copied from Europe and the US. I believe readers can judge for themselves the pros and cons of China’s model.”