The Bird and the Cage: China’s Economic Contradictions

Since the late 1970s, the Chinese Communist Party’s embrace of market reforms has coexisted uneasily with its insistence on political and state control. These tensions—between state authority and market forces—have shaped China’s economic trajectory for decades and have become even more pronounced under Xi Jinping.

In a conversation recorded in December 2025, PIP Fellows Wendy Leutert and Nicholas Borst discuss Borst’s book, The Bird and the Cage: China’s Economic Contradictions. Borst explores how enduring contradictions within China’s political economy help explain recent efforts to tighten control over the private sector, finance, and industrial policy. The discussion examines what these dynamics mean for China’s future growth, economic governance, and its trade and economic relationships with the rest of the world.

Speaker

Nicholas Borst

Nicholas Borst is vice president and director of China research at Seafarer Capital Partners. Previously, he was a senior China analyst at the Federal Reserve Bank of San Francisco and the China program manager and a research associate at the Peterson Institute for International Economics. Mr. Borst has also worked as an analyst at the World Bank. His research and commentary have been featured in The Financial Times, The Wall Street Journal, and The Economist. He is a fellow in the National Committee on U.S.-China Relations’ Public Intellectuals Program and has testified before the U.S.-China Economic and Security Review Commission. Mr. Borst holds a bachelor’s degree from the University of Arizona, a master’s degree from Johns Hopkins University, and is a CFA charterholder.

Moderator

Wendy Leutert

Wendy Leutert is an assistant professor and the GLP-Ming Z. Mei Chair of Chinese Economics and Trade at Indiana University Bloomington. Her research focuses on Chinese political economy, specifically the historical evolution and global expansion of China’s state-owned enterprises. Other areas of her research include leadership in China’s public sector, China’s early reform and opening, corporate governance in state-owned enterprises, and international investment and trade. Her commentary has been featured in media outlets including The Financial Times, The New York Times, Reuters, The Washington Post, and The South China Morning Post. Dr. Leutert is a fellow in the National Committee on U.S.-China Relations’ Public Intellectuals Program. She holds a Ph.D. in government from Cornell University, a MA in international relations from Tsinghua University, and a BA in political science and philosophy from Wellesley College.