To win a competitive edge in international circulation, China has in effect sacrificed domestic circulation, and in particular the spending power of its households. The real question is whether this China model actually serves China's interests.

For China's reform and for Chinese history, Baumol was a precise physician who prescribed exactly the right remedy, even though he never made China his main subject of study.

Respect for entrepreneurship is one of the most important legacies of China's reform era, and only in comparison does its full weight become apparent.