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12:32 pm | October 4, 2019

China’s Model Economist in Poland

Polish policymakers have had a growing interest in recent years in the ideas of Chinese economist Justin Lin Yifu. But to what extent have Lin's prescriptions been adopted, and do they actually suit Poland's domestic context?

By Łukasz Sarek

China’s global influence has many faces. But of all the stories the country has to tell in its push for soft power — following Xi Jinping’s call for state media to “tell China’s story well” — the most compelling on the global stage remains that of its rapid economic rise. What are the reasons for China’s economic development successes? Can those successes be replicated in other countries? 

In Poland, one of the most recognizable faces of China’s economic soft power in recent years has been that of former World Bank chief economist Justin Lin Yifu, an important figure in Chinese economic policy-making. Lin is known among economic experts internationally for his “New Structural Economics” (NSE), an approach to economic policy-making that advocates, following on the paths pursued by China and other Asian economies, an active role for the government in pushing structural changes to the economy.


Chinese economist Justin Lin Yifu, an important figure in China’s economic policy-making, has become a friend and informal advisor for Polish Prime Minister Mateusz Morawiecki. Lin’s theory of “New Structural Economics” is cited in the economic plan of the conservative Law and Justice party (PiS), which embraces a more active state in the process of industrial upgrading.

PiS pursues a political agenda of national pride, focused on regaining economic sovereignty and maintaining an autonomous foreign policy— all notable parallels with China’s stress on national sovereignty and the notion of “the great rejuvenation of the Chinese nation.”

While Polish scholars debate whether Lin’s concepts can and should be adopted, Lin’s popularity with the Polish government shows that the so-called “Chinese Model” can be attractive for elites not just in Asian or African countries but also in strong emerging economies in the heart of Europe.

This means directing investment to certain industries and providing other forms of support, including a favorable regulatory environment, thereby spurring (or so is the hope) a process of industrial upgrading on the basis of a country’s comparative advantages.

Lin has talked about NSE as a “third wave” of development economics, and has spoken against the “Washington Consensus” view that spurns interventionist industrial policies for developing countries and favors unchecked and unguided neoliberal, market-based measures such as trade liberalization, deregulation and privatization. Nevertheless, Lin’s NSE is rooted in the neoclassical paradigm. Lin does not reject the market economy, market mechanisms and basic neoclassical concepts but rather the methods and sequence of their implementation. It should also be emphasized that although he does not admit so openly, Lin’s concepts are not particularly new, and his framework is based on the developmental state concept and the experiences of the so-called “Asian tiger” economies.

While Lin’s “New Structural Economics” should not simply be conflated with the “China Model” — and Lin himself has said that China does not follow a model in the sense that “[we] need to change policy all the time” — the economist has nevertheless become associated with structural assessments of China’s “success,” and with a shift away from the Washington Consensus while maintaining the market economy and market mechanisms. Much of what is central to Lin’s NSE, including a “facilitating [or active] state” that supports  private companies to exploit the country’s comparative advantage, pursuing “the country’s areas of comparative advantage,” is regarded by some as the basis of China’s development success.

In an interview with Shanghai’s Liberation Daily newspaper in April this year, Lin, now a professor at Peking University and founder and director of the China Center for Economic Research, put Poland at the top of his list when he was asked for examples of how NSE has been received in developing countries. The economist noted proudly that Mateusz Morawiecki, Poland’s prime minister and former finance minister, had written forewords for the Polish-language editions of two of his books. Morawiecki had linked the insights and appeal of New Structural Economics to Poland’s “sufferings,” as Lin put it, under “the over-emphasis on the role of the government in the [Soviet-style] planned economy” on the one hand, and its experience of the “malady of neoliberalism’s sole emphasis on the market” on the other.


An online advertisement for a public talk at the University of Warsaw in May 2018 reads: “We invite you to a meeting with Justin Yifu Lin entitled ‘What does the Chinese model of development mean today?’: New Structural Economics.” The ad identifies Lin as “former vice president of the World Bank, close advisor to the President Xi Jinping.”

The reasons for the appeal of Justin Lin’s ideas in Poland are complex — as much about personality as about politics, economics and history. But the context of Lin’s reception is worth exploring in greater detail, as this helps us gain a clearer picture of China’s economic soft power at play in Central and Eastern Europe.

In this article, I explore the interest in Lin’s “New Structural Economics” in Warsaw along three parallels — or shared interests and concerns — between the Polish and Chinese contexts, all of which have contributed to the general appeal of some aspects of the so-called Chinese models as an attractive alternative to liberal democratic capitalism. These include:

* a focus on nationalism in Chinese politics, the importance of national interest in Poland, and the relation in both cases to a narrative of national rejuvenation;

* a mutual belief in the Chinese and Polish leaderships in the state or national identity of capital; 

* a mutual concern about the so-called “middle-income trap” and the need to quickly catch up with developed countries.  

These parallels have facilitated the reception in Poland of Justin Lin’s NSE concepts, which are among the various concepts included in the so-called “China Model,” and their subsequent inclusion in relevant policy responses. I conclude by looking at the limitations of the application of Lin’s NSE concepts in Poland, and by reviewing the domestic discussion of NSE among Polish economists. 

The context of Lin’s reception is worth exploring in greater detail, as this helps us gain a clearer picture of China’s economic soft power at play in Central and Eastern Europe.


As I alluded earlier, personalities and personal relationships are also crucial. In Justin Lin’s interview with the Liberation Daily, as he talked about “[our] “mutual exploration of New Structural Economics,” he referred to his relationship with Mateusz Morawiecki, the Polish prime minister. That relationship goes back to 2015, when, in Lin’s retelling, “the party led by Morawiecki had just won the general election, and he formally announced that he would use the ideas of New Structural Economics to formulate [Poland’s] development policies.”

Lin described his relationship with Morawiecki as close and ongoing. “These past two years, whenever I attend [the World Economic Forum in] Davos,” he said, “I meet with Morawiecki, and we discuss Poland’s development and global trends.”

Poland’s Path to Rejuvenation?

Polish parliamentary elections in October 2015 had a dramatic impact on the country’s political landscape, and this in some ways set the stage for the appeal of Chinese economic thinking among policymakers. The defeat of the liberal-centrist coalition (formed between Civic Platform and the Polish People’s Party) by the center-right opposition party Law and Justice (PiS) under the leadership of Jarosław Kaczyński, marked an intensified turn toward conservatism, based on a core of Christian values, and national interests. The elections also marked a turn toward greater scepticism about the European Union, and about neoliberalism. 


Mateusz Morawiecki addresses the lower house of the Polish parliament in December 2017. Photo by Krzysztof Białoskórski available at under CC license.

The political agenda of PiS, summed up in the phrase, “Poland rising from its knees,” is quite distinct as a form of Polish national pride, focused on the notion of the boosting economic development and regaining economic sovereignty, gaining prominence as an important actor within the EU and the CEE region, maintaining an autonomous foreign policy (not dictated by Berlin or Brussels), and building modern and capable armed forces. Nevertheless, there are notable  parallels with China's stress on national sovereignty and dignity under Xi Jinping, and the notion of “the great rejuvenation of the Chinese nation.” Both visions involve a patriotism rooted in an idea of a nation as the state’s foundation, paired with a vision of modernization and prosperity. The past experience of the fascist and communist occupation in Poland and China’s century of humiliation impact the way the PiS and CCP respectively shape their present-day policies.

The October 2015 elections put PiS in a position to implement a broad range of political and economic reforms and policies around the party's national interest-based political agenda, without the need for public consultation or concern for opposition. PiS now holds an absolute majority in Poland’s parliament, and with Law and Justice politician Andrzej Duda serving in the presidency, the party has had full control of both legislative and executive powers in Poland.

Regionally, the PiS agenda envisions a strong Poland that leads in Central and Eastern Europe, regaining its national dignity and economic sovereignty — which the party sees as having been eroded by bureaucrats in Brussels and the sway of the West, principally Germany, over Polish political and economic life. At the same time, the party hopes Poland can remain a relevant, though independent, political player within the European Union – reshaping the rules and mechanisms governing the EU, not leaving it altogether as some observers often assume. The party’s platform has included new social welfare programs, such as increased pension payments and family benefits, that entail substantial increases in state spending, but also play an important role in boosting economic development, wealth redistribution and improvement in living standards for a large share of Polish citizens. Despite increases in spending, the PiS is also pushing for a balanced budget on the back of increased revenues. Some have read these policies as a populist move to shore up the political support necessary to keep the party in power ahead of parliamentary elections this month. 

In November 2015, shortly after the parliamentary elections, Andrzej Duda appointed Mateusz Morawiecki, a Polish economist and former chairman of Bank Zachodni WBK, as deputy prime minister and minister of development. Morawiecki had previously served from 2010 to 2012 on the economic council advising then-Prime Minister Donald Tusk. In March 2016 Morawiecki announced that he had formally joined PiS. The following September, he was appointed minister of finance, placing him in the driving seat of budget and government finances as well as overall economic policy. The release in September 2016 of Morawiecki’s grand economic plan, called the “Strategy for Responsible Development” (Strategia na rzecz Odpowiedzialnego Rozwoju), and sometimes called the “Morawiecki Plan,” marked the introduction of an economic vision to match the PiS ethos of national pride and a Poland “rising from its knees.” The SRD, which can be downloaded here, became Poland’s official economic strategy in 2017 — a year that would also mark Morawiecki’s continued political climb as he replaced Beata Szydło as prime minister in December.

In Morawiecki’s address as he began in the post of prime minister, the ethos of Polish revival was palpable. Poland, building on “our great national heritage,” was now rising above its historical challenges, “rebuilding that which we have lost.” The new prime minister thanked his predecessor for her “constant faith in the sense of restoration of the Republic of Poland.”

Poland “rising from its knees” shares the sense found in China’s rejuvenation discourse of a return from the depths of modern history to a lost national greatness and dignity. And according to PiS, reaching its goals requires Poland, like China, to strike out on its own development path. This is where Justin Lin’s ideas, and China’s experiences, come into the picture. According to theStrategy for Responsible Development,” Poland should not blindly follow the Washington Consensus framework. It should instead redefine it and adapt it to the country’s needs. As Morawiecki wrote in his introduction to the SRD: 

The transformation [in Poland] after the fall of communism required a redefinition of the role of the state in the economy. The foundation on which Polish capitalism and prosperity was to be built was the set of rules of the so-called Washington Consensus, including deregulation, privatization, trade liberalization and free movement of capital.

Morawiecki referred to this period of liberalization as a triumph of “the dogma that the best industrial policy is no industrial policy.” What Poland needed instead was a strong state capable of making strategic development decisions.

The Active State

Morawiecki and the PiS are redefining the role of the state in the economy, adopting the view that capital has nationality, and that the state therefore must be a central actor in managing economic diplomacy and guaranteeing economic sovereignty — having an active role in stimulating and supporting industrial development to make it more efficient and better aligned with the overall economic development strategy. As sociologist and economist Anna Gromada wrote in 2017: “The PiS victory in 2015 meant not only reconstruction the political scene in Poland, but also a statist shift in almost all areas of public life, including the economy.” 

In his foreword to the Polish edition of Justin Lin’s New Structural Economy for Less Developed Countries, published by the University of Warsaw’s Faculty of Management Press in 2017, Morawiecki announced the failure of the Washington Consensus and classic neoliberal theory in the CEE region, and re-stated his party’s opposition to laissez-faire concepts. 

Morawiecki had already made this position quite clear in his introduction to the SRD, in which he wrote: “Of course, there is no one recipe for modern capitalism. However, in the face of today’s civilization challenges, market unrest and social challenges, and with the current technological progress, designing the best development methods should be the fundamental duty of the modern state.”

The influence of Justin Lin’s development playbook is unmistakable here, and indeed Lin’s “New Structural Economics” is cited directly in the SRD document to support the idea of a more active state in the process of industrial upgrading. At one point in his introduction, Morawiecki expands on his party’s views regarding the role of the state in overall economic development, including the directed development of strategic sectors: 

The state has a fundamental role to play in initiating and implementing changes in the socio-economic development model. The basis of the adopted Strategy is therefore the belief that countries with proactive policies can lend positive impulses and generate positive pressure for the creation of a modern, an innovative and sustainable economy.

In the Polish political context, this emphasis on the role of the state — which is associated closely with Lin’s NSE and draws some elements from the "China Model" — also has implications for questions of democratic governance. This is an issue I will come back to in a moment.

But there is a third parallel between the Polish and Chinese contexts that has encouraged interest in the ideas of Justin Lin — and that is shared apprehension about the dangers of the so-called “middle-income trap.”

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Trapped in the Middle

Weathering the global financial crisis in 2008, China’s economy continued to be the envy of the world, reporting blistering GDP growth of 8.7 percent in 2009. But by 2011, a level of unease had already set in within the Chinese Communist Party, which remained “nervous about the sustainability of economic growth.” A joint report called China 2030, released in 2012 by the World Bank and China’s government-run Development Research Center, called China’s economic performance over three decades “remarkable,” and noted that “China is well positioned to join the ranks of the world’s high-income countries.” But the report also stressed that the country “must change its policy and institutional framework” if it wished to become a “modern, harmonious, and creative society by 2030.”

“China’s policy makers are already focused on how to change the country’s growth strategy to respond to the new challenges that will come, and avoid the ‘middle-income trap,’” the report said.

Since that time, the “middle-income trap,” a term frequently used by the World Bank to describe countries that get mired at a middle level of economic development as they try to become wealthy, has become a buzzword often heard when talk turns to China’s efforts to “rebalance” its economy and move up the value chain.

The “middle-income trap” has been a priority, and a key issue in Poland too, where policymakers talk about unlocking the latent potential of Polish companies, fostering more dynamic growth, and encouraging technological advances and innovation. The hope is that all of this might lead to better-paid, high value added jobs, and to a richer society and a stronger domestic market. Ultimately, the achievement of these goals could result in higher revenues for the state, which would serve the broader PiS agenda of achieving more equal income distribution and a more developed social welfare system. 

As he discussed the implementation of the Strategy for Responsible Development during a parliamentary meeting in 2017, Morawiecki called the “middle-income trap” “one of the main pitfalls identified in the Polish economy.”

Morawiecki’s SRD actually identifies five “development traps” facing Poland. These include the “middle-income trap”; the “imbalance trap” (that is, a lack of balance between the Polish and foreign capital); the “average product trap” (meaning that products should move up the value chain); the “demographic trap” (namely, an insufficiency of young and skilled workers); and finally the “weak institutions trap” (taking us back to the NSE notion of the “active state” that pushes industrial restructuring).

Like the “middle-income trap” in the Chinese context, these traps are seen as obstacles on the road to national revitalization. While for China that goal, linked to the notion of national "rejuvenation," is to achieve a moderately prosperous to well-off society by 2020 and to build "a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious" by 2049 — in time for the 100th anniversary of the People’s Republic — the goal in Poland is to catch up with or surpass the wealthier nations of western Europe in terms of income. Morawiecki has said that his overall objective through the SRD is to raise incomes and improve social and economic cohesion. He has projected that by 2030 the average Polish family will have a disposable income close to the European Union average.

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Justin Lin’s “New Structural Economics” is cited in the third footnote of Poland’s SRD.

Back in July, Morawiecki summed up the PiS agenda as “a dignity agenda,” and a “great development agenda,” that would mean Poland’s steady rise through the European ranks. With continued strong growth, the prime minister said, the country could “catch up with Italy in eight years, catch up with Spain in 10–12 years, and catch up with France in 13 or 14 years.”

The imprint of Justin Lin’s approach to the “middle-income trap” is clear in the text of the SRD, as on page 9, which follows the Davos 2016 agenda around the idea of a “fourth industrial revolution” and includes a section citing Lin’s NSE in a footnote. “Building lasting competitive advantages for the economy requires active and selective support of the sectors which, according to currently available knowledge, have significant potential for achieving global success,” the SRD reads. “This is associated with the need for the state to make strategic choices of areas that can generate the greatest effects for the entire economy.”

Lin directly associates the “middle-income trap” with a failure on the part of middle-income countries to properly apply their limited resources to the priority of industrial upgrading. In his March 2017 paper Industrial Policies for Avoiding the Middle-Income Trap: a New Structural Economics Perspective, Lin writes: 

The middle-income trap is a result of a middle-income country’s failure to have a faster labor productivity growth through technological innovation and industrial upgrading than high-income countries. Industrial policy is essential for the government of a middle-income country to prioritize the use of its limited resources to facilitate technological innovation and industrial upgrading by overcoming inherent externality and coordination issues in structural transformation. 

In both the Chinese and Polish cases, as conceived by policymakers and economists like Morawiecki and Lin, the process of “rejuvenation,” tied up with the attainment of high-income and national dignity, means that the country must navigate past the hazards of the “middle-income trap” with the coordinating hand of a strong state that can keep a shrewd eye on the needs of industrial upgrading.

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Polish Prime Minister Mateusz Morawiecki meets with economist Justin Lin at Davos in January 2019, and Tweets about it.

Friend, Adviser, Influencer

Prime Minister Morawiecki, the chief architect and principal implementer of the PiS economic agenda, has been quite open about Lin’s influence on the Polish economic strategy formulated by his party.

Morawiecki and Lin had several meetings in Davos in both 2016 and 2017, and the two met again this year — the Polish prime minister sharing the meeting on Twitter and saying they had talked “not only about the economic development of Poland, but also about the situation and prospects for the world.” A release from the prime minister’s office noted that: 

In the morning, the Prime Minister met with prof. Justin Yifu Lin, one of the world’s most famous economists. The Head of the Polish Government discussed the Polish economic model and the reforms introduced over the last three years.

Justin Lin has been a clear source of inspiration, and perhaps also consultation, for Morawiecki and the PiS, though it is still unclear how much influence Lin’s ideas have actually had. The promotional text for a public talk by Justin Lin hosted at the University of Warsaw in May 2018 asked: “Is it possible that the doctrine of professor Justin Lin Yifu had an impact on the Morawiecki Plan?”

Lin has been a regular participant in public discussions in various forums over the past two years in Poland, including a January 2017 lecture organized by the Polish Ministry of Economic Development, an appearance at the European Economic Congress in Katowice in last year, and a public debate this past June at the University of Warsaw on “Chinese lessons and Polish opportunities.”

Justin Lin has been a clear source of inspiration, and perhaps also consultation, for Morawiecki and the PiS.


In an interview with journalist Agaton Koziński in February 2016, shortly after he and Morawiecki met again in Davos in January, and months ahead of the release of the SRD, Justin Lin spoke in glowing terms of the then-deputy prime minister, and their ideas seemed already to closely align: “We talked and he impressed me. It was clear that [Morawiecki] is aware that if Poland wants to develop further, it must invest and support industry through the development of technology.”

“You can see that he has an idea on how to develop Poland,” said Lin.

In his foreword to the Polish edition of Justin Lin’s New Structural Economy for Less Developed Countries, Mateusz Morawiecki hints that the SRD is a direct response to the NSE framework. It must be noted, however, that the PiS economic program draws inspiration from much wider spectrum of theories that also include both Immanuel Wallerstein’s world systems theory and Dani Rodrik’s industrial upgrade (SEE Igancy Morawski), as well as Louis Kelso’s binary economics (SEE Krzysztof S. Ludwiniak). Morawiecki has also highlighted himself that the SDR adopts only selected NSE concepts and is not an unreflective emulation of patterns proposed in the NSE and applied in some Asian countries. The differences between the NSE and SDR arise from the geopolitical differences in Poland, and the SDR is a project tailor-made to Polish capacities and expectations. 

In the Chinese media context, Justin Lin’s influence on Polish policy-making is readily accepted as an example of the successes of New Structural Economics, and as proof of the applicability of Chinese economic concepts across the world. Introducing an interview with Justin Lin earlier this year, China’s Netease news portal reported that “in recent years, New Structural Economics has been concretely applied in Poland, Africa and other countries and regions, and has obtained results.” When the interviewer asked Lin whether he received the same enthusiastic welcome in Poland that he did in China, he responded: “It’s hard to say whether I’m welcomed or not, but I’m very happy to see that not only has my theory been used, but that it has made real results.”

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Mateusz Morawiecki addresses the lower house of the Polish parliament in December 2017. Photo by Krzysztof Białoskórski available at under CC license.

Polish Perspectives on NSE

Lin may celebrate Poland as an example of his ideas in action, but the conversation within Poland about New Structural Economics and the SRD is more complex. While it is true that the NSE framework has been embraced to some extent by the PiS government, and the reasonable implementation of selected NSE concepts could potentially be useful for Poland’s economic and industrial development, most Polish economists are quite divided on the usefulness of NSE and notions of the "China Model." 

Some highlight the argued strengths of the NSE framework, such as the selection of a particular model economy as a reference point in proposed modernization activities, or the selection of particular industries that can benefit from state support (such as electric cars). Others argue that the novelty of NSE is in fact over-stated, and that in fact Poland’s economic transformation after 1989 fits the pattern of the NSE framework. They suggest that while Polish policymakers spoke from the 1990s onward about free market rules, active industrial policies were actually enacted during the transformation long before the PiS rise to power in 2015. This being the case, they say, the the value of NSE framework lies in its different approach to the basic neoclassical paradigm, so that official adoption of the NSE framework helps remove the contradiction that existed before 2015 between the dominant liberal rhetoric of free markets and the practical implementation of industrial policy.

The general assumptions of Lin’s NSE concerning investment financing also face challenges under conditions in Poland. One of the key components of NSE is accumulation of capital by domestic investors. Capital can be accumulated by enterprises but bank savings and deposits of the individuals also play an important role. In Asian states and China the underdeveloped public social security system and services provided by state have forced people to rely on private savings in case of retirement or health problems. This has translated into relatively low public expenditures and larger amounts of money available for investment. In Poland, public financing of the social security system has encouraged lower levels of private savings.

Lin may celebrate Poland as an example of his ideas in action, but the conversation within Poland about New Structural Economics and the SRD is more complex.


The Elephant in the Room

Still others emphasize the fundamental differences between Poland and China, arguing that Lin’s concepts can and should be adopted and adapted only selectively, and they criticize the conceptual and practical limits of NSE. One of the key sticking points concerns key differences between the political systems of China and Poland, and the deep economic differences that result. Despite the numerous actions taken by the ruling coalition to limit the independence of judiciary and gain control over autonomous administrative bodies, Poland remains a democracy. The Polish government cannot use the tools of control and coercion applied by the Chinese authorities (Golik). 

Some argue that in order to implement a long-term economic strategy, the ruling party would first need to achieve a wider, less partisan consensus. By implementing its SRD strategy as a partisan undertaking, the PiS risks the program being abandoned or significantly modified if its suffers substantial losses in the election cycle (Maria Skóra). In advising the Polish government on NSE implementation, Justin Lin perhaps fails to factor in the political situation in Poland and the main features of its political system. 

The success of the NSE framework, some argue, is based on Confucian values that emphasize cohesion over contention, and political systems that are more “authoritarian,” emphasizing social order and state authority over individual freedoms (Jędrzejczak, Sterniczuk). While many Polish economists share the view that the neoclassical liberal approach does not address many challenges, and they support the idea of a more active state, the majority does not support the idea of introduction to Poland of elements of more authoritarian political systems.

Some also highlight the clear benefits of democracy for long-term development. Jędrzejczak and Sterniczuk write, for example, that the model of an open society based on political conflicts, rivalry and “double democracy” —understood as the non-discriminatory access of all citizens to economic and political life —is not only more effective and dynamic in reacting with innovative actions to challenges they experience, but in many cases, also comes with the capacity to transform threats into successes. The sharpest critics of Lin’s ideas even counter that his proposed framework is little more than athe modern version of protectionism, which in its Polish version is merely reshaped to comply with rules imposed by the EU.

The adoption of selected NSE components by the Polish government, and the keen interest in personality and pronouncements of Justin Lin, demonstrates that in a broader sense the so-called “China Model” can be attractive for elites not just in Asian or African countries but also in strong emerging economies in the heart of Europe. Certainly, drawing lessons from the successes of other countries is something to be encouraged, and to the extent that the developmental state model and NSE concepts have been successful, they are bound to interest economists and policymakers in Poland. But learning and emulation must always come with clear-headed cautions about the wider context, and social and political costs. Hopefully, the charm of Chinese models —in whatever permutation —will not lead economists or politicians to push for the evolution of Polish democracy in the direction of a single-party authoritarian regime.

Echowall staff contributed some additional research to this article. 

October 4, 2019
Łukasz Sarek

Łukasz Sarek is a researcher and China market analyst focused on China-Poland and China-EU economic relations. Lukasz studied law and sinology at the Warsaw University and worked for many years in China. Currently he works as a think tank analyst and business consultant. All views expressed in this article are author's only and do not represent opinions of any entity with which author is affiliated.