The Chinese model is not new.  It's called mercantilism, and this was the predominant economic development model before Adam Smith's free trading capitalist critique of mercantilism. <a href="http://en.wikipedia.org/wiki/Mercantilism" rel="nofollow">http://en.wikipedia.org/wiki/Mercantilism</a><p>This is how the United States developed in the past.  Alexander Hamilton's economic strategy for the United States followed a similar script.  See his <i>Report on Manufactures</i>: <a href="http://en.wikipedia.org/wiki/Report_on_Manufactures" rel="nofollow">http://en.wikipedia.org/wiki/Report_on_Manufactures</a><p>This report was read by Friedrich List, who then wrote a similar development strategy for the 19th C. German economy.  It was this strategy that made the German industrialization so rapid and effective. <a href="http://en.wikipedia.org/wiki/Friedrich_List" rel="nofollow">http://en.wikipedia.org/wiki/Friedrich_List</a><p>There are a number of spectators who have correctly characterized China's model as modern-day mercantilism (even though they disagree on specifics and the appropriate response):<p>Krugman: <a href="http://krugman.blogs.nytimes.com/2009/12/31/macroeconomic-effects-of-chinese-mercantilism/" rel="nofollow">http://krugman.blogs.nytimes.com/2009/12/31/macroeconomic-ef...</a><p>NRO: <a href="http://www.nationalreview.com/nrof_bartlett/bartlett200311050823.asp" rel="nofollow">http://www.nationalreview.com/nrof_bartlett/bartlett20031105...</a><p>See also: <a href="http://www.associatedcontent.com/article/1764172/china_mercantilism_and_new_global_economic.html" rel="nofollow">http://www.associatedcontent.com/article/1764172/china_merca...</a> and <a href="http://chinaconfidential.blogspot.com/2006/06/mercantilism-with-chinese_23.html" rel="nofollow">http://chinaconfidential.blogspot.com/2006/06/mercantilism-w...</a>