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To understand the policies of the Chinese government, foreign as well as domestic, it is necessary to understand the tacit social contract that underpins the regime. It begins with economic development. Any visitor to China today – at least to the most developed urban parts of this vast country – cannot but be astonished by the sheer magnitude and swiftness of the transformation from an underdeveloped and misruled Communist autocracy into a capitalist dynamo that has just outpaced Japan to become the second largest economy on earth and has its sights on eventually closing in on the United States at the top of the global league tables.

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