The New China Playbook: Beyond Socialism and Capitalism by Keyu Jin

Book Review by Nout Wellink

For an outsider, China is difficult to fathom. Such an outsider constantly encounters government intervention that contradicts free market principles. The author of this fascinating book, Keyu Jin, attempts to clarify that and why China’s approach (“Playbook”) differs from that of the West. It is different, sometimes hard to understand, and not always consistent.

Jin observes that 30 years after her first stay in the U.S., the same questions are still being asked as in 1997. Her conclusion: even the most sophisticated American has only a limited understanding of what is happening in China. There is a deeply and broadly rooted conviction that disaster will strike if the country does not converge toward Western values, economic systems, and political beliefs. In her book, she takes a more nuanced, complex, and meaningful approach. Only then can one understand which elements of the Chinese model are crucial and permanent, and which are transient. In my view, Keyu Jin’s analysis is of great value to anyone involved with China in any way, such as politicians, businesspeople, and investors.

Jin sees the model that has developed in China (“Socialism with Chinese characteristics”) as a unique blend of a centrally planned economy and a market economy, in which a balance is constantly sought between the state, industry, market, community, and individual. I have strongly experienced the pervasive presence of the State (read: the Communist Party) during my executive involvement with two major Chinese state banks, BoC and ICBC. I endorse Jin’s assertion that this dominant presence, on the one hand, poses an inherent risk to Chinese society and the economy, but on the other hand, as I have experienced, also represents a potential source of great strength.

According to Jin, the unusually strong position of the State is rooted in the country’s centuries-old bureaucratic structure and in the state ownership of land, resources, and institutions. There is a dynamic balance between central and local authorities, with occasional clear policy conflicts. During external shocks or crises, Jin notes, power tends to shift toward the center. We have seen this in recent years, with the Party’s grip on society clearly tightening.

The Party views SOEs (State-Owned Enterprises) as a crucial part of the Chinese model, indispensable for achieving vital policy objectives. These enterprises will not be privatized, even under significant external pressure. Therefore, discussions with China should not focus on privatization but on ensuring that these institutions function in a market-conforming manner. This is a more sensible and discussable approach because the efficient allocation of scarce resources is, of course, also in China’s interest.

Jin links the dominant role of the State to the elusive concept of ‘culture.’ She points to the paternalism deeply rooted in China’s history and culture. I cannot judge that, but I can assess a conclusion she draws from it. In her view, “Stability” is the top priority of “China’s fatherly government.” Stability is indeed a key word when it comes to understanding China. Political or economic discussions that threaten stability can not only lead to confusion and unforeseen reactions from the authorities but also to overreactions, which in turn cause instability. Understanding, as Jin rightly notes, is different from unconditionally approving all actions taken based on this top priority. In the author’s words, there is a constant maneuvering between Scylla and Charybdis.

Jin’s book is too rich in content to delve deeply into the many aspects she mentions in a short space. Let me highlight a few that I recognize from my own experience. Jin refers to the collective memory of a not-too-distant past of hunger, deprivation, and grueling work. That memory and the tremendous progress that followed—as a colleague once told me—make him and others look with some leniency at the mistakes made by the current regime. When I asked how long this leniency—and the acceptance of the aforementioned paternalism—could last, the rather vague answer was that flexibility and pragmatism are part of the Chinese approach. “No path is fixed.” This aligns with Jin’s observation that China is constantly changing. More space will be demanded and granted for the protection of the individual. Governments will also increasingly be held accountable for their actions.

Another important point Jin mentions is the scale of the country and the often cutthroat domestic competition in the private sector. A combination of scale and misguided central impulses can, of course, have disastrous effects. A terrifying example is Mao’s choice of the Russian industrialization model. But scale and competition can also lead to unparalleled cost reductions, thereby causing frictions in international trade. The Chinese economy cannot be understood without incorporating this into analyses and judgments.

The dynamism of the private sector is also evident in the rapid and widespread adoption of new technologies. The startup DeepSeek (a “low cost, high performance large language model”), launched on January 20, 2025, has caused a shockwave, not only far beyond China but also within it. In China, DeepSeek sparked a wave of national pride on one hand, but also some fear—especially among young job seekers. The shockwave in the Western world mainly concerned the progress China had made in AI, but we insufficiently realize that the real shockwave is yet to come due to the lowering of the cost threshold. Businesses and governments across China, encouraged by the State, are now planning a rapid implementation. Reports from companies and local governments are already appearing in the press. To compete with China, we must focus not only on promoting technological marvels but also on their broad, actual use.

Jin sees innovation and entrepreneurship as “defining features,” crucial characteristics of the Chinese economy. In her book, she tries to demonstrate that it is the combination of state guidance at the macro level and the operation of the market mechanism at the micro level that has led to China’s growth explosion and technological leap forward in such a short time. In China’s hybrid model, things sometimes go wrong due to conflicting mandates at the central and local levels and tensions when the government and markets move in different directions. But flexibility and pragmatism then act as correctives: there is no fixed path to the future.

In the final chapter, Jin addresses several points that deserve further reflection. She points to the Chinese tradition of prioritizing the community interest over that of the individual. This, in her view, stands in sharp contrast to the approach in the West. In her Chinese “Playbook” for the future, she sees a quest for a new balance between greater equality and market initiatives, security and quality growth, self-reliance and engagement with the rest of the world. China, she believes, is leading the way in this quest. “Common prosperity” in China and “shared prosperity” with the rest of the world are, in her view, crucial parts of China’s future strategy. She finds these elements lacking in the Western world, which explains why people there are fearful, angry, and disillusioned. Her remarks about China’s approach to flagrantly illegal incomes, the anti-corruption campaign, and extremely powerful internet giants take on extra significance since the start of Trump’s second presidency.

Another thesis from this eminently readable book deserves attention. China, which long ago was the richest, most technologically advanced, and best-infrastructured country in the world, tirelessly strives for a place that does justice to its size and stage of development. The West, in her view, will have to face and accept that reality, however difficult that may be. Jin’s hopeful message for the future is that our peoples have more in common than we realize. At the same time, she warns that we must be careful not to create a dangerous world “by propagating a transactional worldview of winners and losers, thereby pitting people and nations against each other.” She wrote this before President Trump began his second term.

Despite his many roles and activities in international banking and academia, Nout Wellink finds time to read and write an interesting review for ChinaNU+. This time, it’s The New China Playbook: Beyond Socialism and Capitalism by Keyu Jin. In Nout Wellink’s opinion, the analysis by this author is of great value to anyone involved with China in any way, such as politicians, businesspeople, and investors.