China's search for a new path is fraught but necessary
Andrew Leung says the debate over the path to transformation is fierce but may be reconciled
There are many signs that China has now reached a historic watershed. First, the economy is changing towards slower, but more balanced, equitable and sustainable growth, to be driven by consumption instead of capital investment and exports.
Second, according to researchers at the Peterson Institute for International Economics, an increasing number of currencies are moving in sync with the renminbi, treating it as a "reference currency" instead of the US dollar.
Third, for the first time, China tops the world in patent applications. Fourth, a rising citizenry is succeeding in reversing government decisions on such matters as social justice, the local environment and press freedom. Fifth, "labour re-education" is to be scrapped. Sixth, China's new leadership is now fighting corruption as a top threat to the nation's stability.
Meanwhile, externally, China has grown too big and too globalised to continue with Deng Xiaoping's famous dictum to "lie low and bide its time". A nascent blue-water navy is taking shape and the nation has become more assertive over its maritime territorial claims.
According to a report by the European Council on Foreign Relations, China needs to enter into a new era. As the report put it: After Mao Zedong's political revolution ("China 1.0") and Deng's economic revolution ("China 2.0"), what comes next must be a "China 3.0".
The report, a collection of essays by some of China's most influential thinkers, indentifies three traps or crises in which China finds itself. How to respond to them is now the subject of intense debate.
"In the economic realm," the report says, "the main divide is between a social Darwinist New Right that wants to unlock entrepreneurial energy by privatising all the state-owned companies and an egalitarian New Left that believes the next wave of growth will be stimulated by clever state planning.