China's dramatic economic success over the past several decades has attracted worldwide attention. Its high growth rates, however, have caused different effects across regions, countries, sectors and firms. On the one hand, Chinese imports have provided important new markets for exporters throughout the world. Raw materials exporters have benefited disproportionately, but producers of high-tech industrial goods have also taken advantage. On the other hand, China's export juggernaut has outperformed most of its trade partners – especially with respect to light consumer goods – and created large and growing trade deficits. Those deficits, in turn, have been offset by capital outflows of various kinds, which have led to significant international imbalances as well as greater Chinese influence in developed and developing countries alike.

Beyond its economic impact, China is important because some people regard it as a potential model that developing countries might follow to enable them to grow faster and improve the living standard of their populations. Clearly China shares a number of characteristics with the “Asian model”, which has been touted for several decades, but there are also significant differences, as will be seen. One of the most important differences is the sheer size of China, which makes its trajectory hard to emulate. Likewise, the authoritarian political system in China is becoming less typical of the rest of Asia. If we are to investigate the attractiveness of the “Chinese model”, then, it is necessary to start with a clear understanding of its characteristics, both the upsides and the downsides. Politics clearly play a role here as do economics.