Analyses of China veer wildly between the awestruck and the apocalyptic, between the view that the country has achieved wholly exceptional and unstoppable economic growth and that its growth must end in disaster, probably soon. Lately, the polluted environment has taken pride of place in the apocalyptic argument, on the theory that China’s current economic model is unsustainable, whether because of the domestic implications of dirty growth, the planetary implications, or both. The worldwide focus on the country during the recent Beijing Olympic Games gave greater prominence than ever to these environmental issues.

But both the awestruck and the apocalyptic analyses miss the blend of helpful precedent and hard-fought adaptation that has guided China’s course since market-based liberalization began, in the 1970s. Far from being unprecedented, the broad shape and nature of the country’s growth from the 1980s onward has been pretty similar to the pattern shown in earlier decades by Japan, South Korea, Taiwan, and other East Asian success stories. Like them, moreover, China has had to adapt constantly as circumstances changed and new challenges arose to confront policy makers and managers alike.

In the late 1980s, the country was roiled by hyperinflation and the post-Tiananmen reform crisis; in...