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China Is Undergoing a Renaissance. What’s Behind It?

Welcome to the Chinese Century.

George Yip, professor of marketing and strategy at Imperial College London’s business school, contends that China is undergoing an economic awakening, the likes of which haven’t been seen since America’s rise to power in the 1900s.

“This is the Chinese Renaissance,” Yip told an audience over dinner Thursday evening at Fortune’s Global Tech Forum at the Four Seasons Hotel in Guangzhou, China. (View a video livestream here.) He compared the country’s breakneck revitalization to the better-known European Renaissance which began among Italian city-states in the 14th century.

China is on the up and up for reasons that echo that older renaissance, Yip said: competition between provincial cities. Centuries ago, municipalities such as Florence and Venice battled for supremacy, fueling innovation and growth among them.

Now Yip said he detects a similar mentality within China. He attributed the advent of this state of affairs to the ruling Communist Party’s adoption of performance indicators for local governments tied to Gross Domestic Product.

In other words, by incorporating lessons from free market capitalism and grading leaders on their region’s economic output, China has created a meritocracy of sorts and thereby promoted prosperity. (Yip said he now hopes to see more environmental standards added to the mix.)

Fortune’s Clay Chandler, who moderated the evening’s keynote conversation, countered that business savants who laud China’s rise once said similar things about Japan when it burst onto the international scene in the 1980s.

“I think China can go beyond that,” Yip fired back. In part, he believes China’s gigantic home market provides an engine that sets it apart from its Asian neighbor; China has 1.3 billion people versus Japan’s comparatively measly 130 million people.

Another point of differentiation that works in China’s favor: its populace’s zeal for gambling. “The biggest advantage that China now has, in addition to size of population and all else, is a willingness and ability to take risk,” Yip said, noting that this enthusiasm is not shared by Europeans and is increasingly scarce in the U.S.

Ruminating on the reasons for China’s greater perceived risk tolerance, Yip chalked it up, at least partly, to the trauma of the Cultural Revolution, a period in the nation’s history marked by vast, violent political upheaval. This tumult “shook everyone so much that it prepared people to take more risks.”

“They’re prepared to do anything now,” he said.

Call it a comeback.