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China's growth is threatened by its extractive institutions from "summary" of Why Nations Fail by Daron Acemoglu,James A. Robinson
China's growth is hampered by its extractive institutions. These institutions are designed to extract resources and wealth from the majority of the population and concentrate it in the hands of a few. This creates a system of inequality and limits the potential for sustainable economic growth. In China, the Communist Party holds a monopoly on political power and uses this power to maintain control over the economy. This has allowed a small group of elites to amass wealth and influence, while the majority of the population struggles to make ends meet. The lack of political and economic freedom in China stifles innovation and entrepreneurship. Without the ability to freely pursue new ideas and opportunities, the economy is unable to reach its full potential. This limits the country's ability to compete on a global scale and achieve long-term growth. China's extractive institutions also lead to widespread corruption and inefficiency. When power is concentrated in the hands of a few, there is little accountability and oversight. This creates opportunities for bribery, kickbacks, and other forms of corruption that undermine economic development and erode public trust. To achieve sustainable growth, China must transition away from extractive institutions and towards more inclusive institutions. Inclusive institutions are those that create a level playing field for all citizens, encourage innovation and entrepreneurship, and promote economic and political freedom. Only by making this transition can China unlock its full potential and ensure long-term prosperity for its people.
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