Operating in a country where something as modest as opening a cigar shop can be fraught with difficulty, Chinese entrepreneurs are renowned for being able to find creative solutions to a wide range of everyday problems. But that resourcefulness won’t serve China’s economy in the long run, according to one veteran China watcher.
fraught with：充满 renowned：著名的，有名的 resourcefulness：足智多谋
veteran：富有经验的
What China lacks, argues economist Arthur Kroeber, founder of the research firm Dragonomics, is innovation that can translate to business with the outside world.
“What’s sad is the amount of creativity you see in China is phenomenal,” Mr. Kroeber says. “But it’s not always directed in ways that are ultimately productive.” It’s one thing to figure out how to fix a car that needs parts no longer available on the market. It’s another to create “innovative solutions which are scalable throughout the entire world.”
phenomenal：异常的，显著的 ultimately：最后，根本上，基本上 scalable：可扩展的，可伸缩的
China in the middle of trying to shift its economy away from an era of super-charged growth fed by exports and massive government spending to an age of slower but more sustainable growth based on innovation and domestic consumption. Some analysts, like Peking University finance professor Michael Pettis, are skeptical that China can pull off that transition without going through a lot of pain.
skeptical：怀疑的，多疑的 pull off：赢得，脱下，努力实现
Speaking at a panel discussion for the Beijing Bookworm’s Literary Festival on Sunday, Mr. Kroeber laid out a relatively optimistic case for China’s future growth as long as the country can find a way to reform the financial sector and tax system, trim the unfair advantages enjoyed by state-owned enterprises and address an aging population.
Potentially the biggest obstacle to China’s continued economic growth, Mr. Kroeber argued, is its Internet filtration system, otherwise known as the Great Firewall. The big question, he said, is whether the Chinese can “ever accept a political system that is open enough to allow the open-knowledge networks that are required for truly modern innovative post-industrial economy. Right now I don’t see it.”
filtration：过滤，筛选
The best innovation in the post-industrial world comes from “the sharing of knowledge and information across a variety of fields,” he said, adding: “Innovation comes when you take knowledge in one area and it migrates over to another area and someone comes up with a new way of using it. China seems to have a political system that mentally at its core is opposed to those networks ever becoming viable.”
The Internet limitations have also meant that Chinese companies have struggled to expand overseas, although that’s less important in a country with such a massive domestic market. “You have to invest a lot in figuring out how to make a go of it here,” which means less investment in figuring out how to operate globally, he said. But Chinese companies can profit in the enormous domestic market without a global expansion. “So, who cares?” Mr. Kroeber asked.
What happens next depends a lot on how the new government faces up to the problems, said Mr. Kroeber, who described himself as a “skeptical optimist.” He figured there’s a 50 to 60% probability that the new leadership acts on the need to reform the financial system, the tax system and state-owned enterprises. But there’s also the chance that China’s new leaders will not do anything and the country will hit an “economic wall” ─ a crisis that will force the government to act.
The third possibility is that the forces against change will be so powerful that the system will just “lock up.” That scenario, in which the government doesn’t deliver on its implied social contract “high growth in exchange for very little political freedom” will cause even bigger problems, Mr. Kroeber warned.