I learnt a valuable lesson about national and moral education yesterday: empty your e-mail inbox before you criticise the China model. In yesterday's paper I imagined what a suitably patriotic textbook might have to say about China's model of economic development. My imaginary text hailed China's achievement in generating sustained rates of rapid growth over the last 30 years. It credited the unique mix of Confucian values and the benevolent hand of the state for allowing China to avoid the financial crises and recessions that regularly afflict Western countries. And it praised China for sharing the fruits of growth among the population at large and lifting more than 400 million people out of poverty. Then I went on to imagine what a more critical examination of China's economic model might reveal. Naturally this was rather less flattering. It wondered whether Beijing's economic model was really so successful at steering clear of banking crises and cyclical downturns. And it questioned whether the benefits of China's economic growth are as well distributed as the government likes to claim. It wasn't long before the e-mail messages started to pour in. One reader noted that my imaginary lesson bore no relation to the national education classes taught in mainland schools, which tend to involve singing patriotic songs rather than studying the relative advantages of China's economic system. I'm sure he's right. But, even so, my text extolling the strengths of the China model wasn't pure invention. It was an amalgam of views expounded by various senior Chinese officials and academics. The bit about the Confucian influence on China's economic model, for example, was lifted from a 2009 paper by People's Bank of China governor Zhou Xiaochuan, who extolled 'Confucianism, which values thrift, self-discipline ... and anti-extravagancy'. So, on the whole, I'm satisfied my imaginary lesson does indeed resemble what national education textbooks might have to say if they tackled economics, albeit perhaps not at primary school level. Another reader slammed me for failing to acknowledge Beijing's free market credentials. 'The formula for the China model is: free markets plus one-party rule equals growth. You might call it authoritarian capitalism, but it's first and foremost market-oriented,' she wrote. 'The dichotomy you depict between China's economic model and the free market system in the west doesn't exist.' I disagree. It's undeniable that the growth of private enterprise in China has delivered enormous economic benefits. But liberalisation has been limited. Beijing retains strict control of 'upstream' sectors of the economy like raw materials, energy, and communications, allowing monopolistic state-owned corporations to extract lucrative rents from private companies operating in liberalised 'downstream' sectors like light manufacturing and retailing. Above all, the state controls the financial system. By keeping interest rates artificially low, Beijing provides cut-price funding to state-owned companies at the expense of ordinary depositors, who get a negative real return on their savings, and entrepreneurs, who are denied access to bank credit. In short, Beijing's acceptance of free markets has been highly selective. The state retains control of the levers of economic power, while harnessing the dynamism of the private sector to enhance its own wealth. Several other readers chided me for ignoring the great strength of China's economic model, arguing that Beijing's high degree of economic control allowed China to sidestep the 2008 global slump by immediately ramping up stimulus efforts in response to slowing growth. But, while it's true that Beijing succeeded in maintaining China's high growth rate, it did so only by an enormous explosion in lending. As the first chart shows, in just two years total credit exploded from 120 per cent of GDP to 160 per cent; a ratio comparable to those in the US or Britain just before the financial crisis. Such rapid credit growth is a warning that China did not avoid an economic slump, but merely postponed it. Whatever anyone may claim, China's model has not eliminated the economic cycle. Booms still breed busts. As for the benefits of growth, there can be no doubt they have accrued disproportionately to a tiny minority. If you don't believe that, take a look at the second chart, which shows that urban incomes have fallen relative to per capita GDP over recent years. China's model may have lifted millions out of poverty, but it has denied millions more their fair share of the economy's growth. I've cleared out my inbox now, so please feel free to slap me down.