Forty years on, a sense of history gives way to alarm

China’s first forty years of pro-market growth have been spectacular by any count, but they are ending badly. The country’s biggest customer, the United States, has mounted a trade war that tramples on global trading rules.

Initial hopes of a quick diplomatic solution have been dashed. Instead, Donald Trump has widened the conflict, and promised to widen it further, massively. It is not clear when, or how, it will end — and the damage could be significant, to China and the world.

Last Friday, global experts on the Chinese economy gathered in Canberra for the Australian National University’s annual China Update. The plan was to look back over the triumphs and tribulations of the forty years since former Chinese leader Deng Xiaoping began steering the country towards market reforms in 1978. But any nostalgia was overshadowed by alarm at where this trade war could take us.

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