The Undoing of China’s Economic Miracle

China’s economic “miracle” wasn’t that miraculous. The country’s high-octane ascent over the past 40 years is, in reality, a triumph of basic economic principles: As the state gave way to the market, private enterprise and trade flourished, growth quickened, and incomes soared.

This simple lesson appears, however, to be lost on Xi Jinping. China’s leader is rejecting decades of tried-and-true policy by reasserting the power of the Communist Party within the economy and redirecting Chinese business inward. Indeed, faced with escalating hostility in Washington, Xi’s pivot seems, if anything, to be accelerating—with potentially serious consequences for China’s economic progress, and its relations with the world.

True, Xi isn’t completely drop-kicking free enterprise and free trade. In November, the G20 summit that China’s new economic agenda “is by no means a closed-door policy” and “will create more opportunities for the world to benefit from China’s high-quality development.” Beijing also recently joined the Regional Comprehensive Economic Partnership, a 15-nation pact that created a trading bloc with about it as “a reflection of the commitment to free trade & multilateral trading system.”