The State Strikes Back: The End of Economic Reform in China?

Nicholas Lardy, a preeminent expert on China’s economy, argues that China faces a choice: follow the path of market-based reform or retrench to greater state direction. Mindful of the politics surrounding the choice, he makes the case for well-crafted reform, saying it could spur growth greater than most China analysts believe likely. The State Strikes Back is a must-read for policymakers, businesspeople, and investors with an interest in China’s economic future. —Robert Rubin, former US Treasury secretary

The State Strikes Back makes a compelling, deeply researched, and lucidly written case that the state is resurgent in China as market-oriented reforms stall. Nicholas Lardy, a preeminent expert on the Chinese economy, provides a balanced and insightful overview that, like his previous works, will become standard reference material for anyone interested in understanding the intricacies of the Chinese economy and policymaking process. —Eswar S. Prasad, Cornell University and author of "Gaining Currency: The Rise of the Renminbi"

Nicholas Lardy’s book reflects the meticulous research and methodical analysis that has established his reputation as a leading observer of China. ... Lardy is more astute than other analysts in understanding why [Chinese economic] reform has stalled. ... [He] argues convincingly that the widening productivity gap between state-owned enterprises and private groups, combined with the growing role of SOEs in total investment, seriously hinders growth. —Gabriel Wildau, Financial Times

Nicholas Lardy’s excellent new book, The State Strikes Back, could hardly arrive at a better moment. Using careful analysis to challenge common hypotheses, Dr. Lardy takes a close look at the principal factors affecting China’s longer-run growth prospects. Ultimately, he is hopeful, but realistic: China could sustain its recent pace of growth for an extended period—or grow even faster—but only if the government is willing to return to its earlier commitment to serious reforms that favor market, rather than state, allocation of resources. Kermit Schoenholtz, New York University, and Stephen Cecchetti, Brandeis University

In a timely new book, The State Strikes Back: The End of Economic Reform in China?, Nicholas Lardy ... argues that poor policymaking is to blame for much of the slowdown since the financial crisis. It’s a development that has deflated the previous optimism of many China-watchers, including the economist himself. …The most thought-provoking parts of the text…attempt to understand not just what happened, but why it happened – and what it means for prospects for future reform. Christopher Beddor, Reuters Breakingviews

[Lardy] presents a strong argument that makes The State Strikes Back worth reading for those seeking to better understand the Chinese economy’s structural challenges. William Foreman, Taiwan Business Topics