China’s economic boom is a powerful indictment of neoliberal orthodoxy — because its rejection of neoliberal orthodoxy is what made China’s heterodox form of state-directed capitalism possible.

As China transitioned to capitalism in the 1980s, it rejected the neoliberal prescription for shock therapy: rapid price liberalization, austerity, free trade, and privatization. The neoliberal consensus, of course, did not produce great results around the world. During neoliberalism’s heyday, Latin America and Africa were devastated. Infamously, Russia’s implementation of shock therapy helped to dismantle that global giant’s economy, leaving it the mess it remains today. Meanwhile, China narrowly escaped shock therapy and became the new “workshop of the world.”

Isabella Weber is a professor of economics at the University of Massachusetts Amherst and the author of How China Escaped Shock Therapy: The Market Reform Debate. Neither Weber’s book nor this interview, conducted for the Jacobin Radio podcast The Dig in 2021, are endorsements of the Chinese model. But understanding the Chinese boom, its history, and China’s place within the world system are critically important if we are to make sense of how global capitalism in China and everywhere functions today and where it may be heading. This is particularly true as the neoliberal model enters into crisis in the United States, and as countries everywhere must harness the power of the state over markets to confront climate change.