Warwick Powell Challenges OECD View of China Credit, Defending 4-Decade State-Led Development
Updated
Updated · defimedia.info · Jul 17
Warwick Powell Challenges OECD View of China Credit, Defending 4-Decade State-Led Development
1 articles · Updated · defimedia.info · Jul 17
Summary
Powell argued in a July 17 essay that the OECD wrongly treats a neutral “market” interest rate as the benchmark for judging Chinese firms’ access to low-cost credit.
He said interest rates are political and institutional choices, not natural prices, and that China’s state-owned banks deliberately channel cheaper funding into infrastructure, industrial upgrading and technology.
That framing shifts the dispute from market efficiency to distribution: whether more economic surplus should go to lenders and asset holders or remain with productive investment.
Powell acknowledged risks including bad loans and excess capacity, but said China’s record over four decades—building the world’s largest manufacturing base and major EV and renewable industries—shows finance can serve development rather than financial returns.
The broader implication, he wrote, is that OECD criticism reflects Western policy assumptions about liberalized finance, not a universal standard for evaluating China’s economic model.