China’s liberalization and structural reform drives growth

https://www.project-syndicate.org/commentary/china-liberalization-structural-reform-drives-growth-by-zhang-jun-2019-08

by hhs • 7 years ago

68 107 7 years ago

Merrill• 7 years ago

I would have thought that that the "one child" policy played a large part, since it allowed a larger investment in fewer children by parents and society. This, coupled with an educational system that is able to spot talent and develop talented children, has produced a dramatic increase in China's human capital, without which liberalization would be ineffective. The US had a similar emphasis on developing talent in the late '50s and '60s after the Sputnik shock.

justicezyx• 7 years ago

Cannot be further from truth than this. The timing doesn’t Evernote align...

oska• 7 years ago

Compare the crude birth rate since 1920 for Thailand and China on this Gapminder chart [1]. You'll see that Thailand started with a birth rate higher than China's. In 1967 they were at around the same level at which point they both simultaneously started trending down. Thailand maintained a smooth curve down to its present level which is lower than China's. China's downward curve was interrupted in 1979 (introduction of the One Child Policy) when it curved upward for a bit.

So, despite all the myth-making, China's One Child Policy was an authoritarian disaster that did not reduce births beyond their already downward trend. In fact, it disrupted the already established trend.

[1] https://www.gapminder.org/tools/?from=world#$state$time$star...

dade_• 7 years ago

Last year in Shenzhen, a young man walked up to me and excitedly said, "My name is Will, lets get rich together!"

seanmcdirmid7• 7 years ago

And he wasn’t just scamming?

Tigah_pawszzz• 7 years ago

As someone from China I kinda feel like we are a developed country when I learned I am making more than my peers in UK #GameIndustryPeasant

yocheckit• 7 years ago

My experience with China is that certain parts are 100% first world, but other parts are 100% 3rd world, with many places inbetween.

Whereas the difference between the poorest & richest Brit while significant is nothing compared to the difference between the poorest & richest Chinese.

alienallys• 7 years ago

Well it's because UK population is 66mn while China population is 1400mn.

UK was the oppressor and had all the riches in the world. Infact I feel so bad w.r.t to UK despite conquering, looting so many countries some significant percentage of population lives in poverty.

lkrubner5• 7 years ago

There is a simple counter-argument to this:

“It is telling, however, that China is using its long-term planning and robust implementation capacity not to entrench state capitalism, but rather to advance economic liberalization and structural reform.”

Right, but whatever the plan might be, it clearly isn’t working, since the economy continues to slow. 50 years ago China clocked 8% to 10% growth a year, now they feel very lucky if they can get 6%.

And this is a truly incredible thing for anyone to write:

“The fruits of this approach are irrefutable. In the last decade, a number of Chinese private financial and tech giants have emerged that, unlike their state-run counterparts, have managed to establish themselves as global leaders in innovation.”

So, according to this, it is actually a sign of success that more and more large Chinese firms feel they need to export capital because they no longer see good investments at home. And that’s success?

WoodenChair4• 7 years ago

Right, but whatever the plan might be, it clearly isn’t working, since the economy continues to slow. 50 years ago China clocked 8% to 10% growth a year, now they feel very lucky if they can get 6%.

I think your comment is quite incorrect, and shows a lack of knowledge of Chinese history. 50 years ago (1969) China was going through the "cultural revolution" under Mao which was absolutely devastating for its economy. In the 1980s China began economic liberalization under Deng Xiaoping and that was when its economy began growing tremendously. So, there is a direct connection between liberalization and growth. Of course no growth of 8-10% is sustainable over many decades, and it's likely they are simply reaching a new equilibrium.

lkrubner5• 7 years ago

No, for God’s sake, no, the Cultural Revolution was not devestating to the economy. Where did you read that? During the worst year of the Cultural Revolution, China still managed to grow 8%.

Large scale civil rights violations are not automatically bad for the economy. The German economy grew dramatically during the Holocaust and the best decades for the USA overlap with the mass murder of the Indians and the savage oppression of African-Americans. In China, the Cultural Revolution killed 30 million people, but it did not slow the economy.

tomlockwood• 7 years ago

That's an interesting perspective considering the US Economy hasn't broken 3% GDP growth per year since 2005.

lkrubner5• 7 years ago

I don’t think many people realize how long ago was the era when the USA was special. The USA economy grew faster than any other country for most of the period from 1848 to 1929. A huge gap opened up between the USA and the rest of the world. By 1929, the USA produced more steel than all of Europe combined. But the USA has not been the #1 fastest growing nation in any year since 1929.

roenxi3• 7 years ago

China has a population of more than a billion people, the 3rd largest landmass controlled by a single sovereign entity. The only question is how they managed to fall so low that they weren't a competitive superpower.

It is entirely possible that we don't know what the reason for China's rise is over the short term. I wouldn't trust any article written in English to understand the ins and outs of China's special economic zones, special administrative regions and historical norms and customs.

It is very likely that governance is connected to their success and it is also unlikely that the government is wholly responsible for their success. The situation is complicated. Even deciding if they have achieved 'success' is complicated; I'm not envious of the people who live there.

taneq• 7 years ago

The only question is how they managed to fall so low that they weren't a competitive superpower.

In-fighting because they weren't a cohesive whole? It's like asking how "Europe" wasn't a competitive superpower pre-EU (if it even counts as one now).

mastazi• 7 years ago

population of more than a billion people, the 3rd largest landmass
how they managed to fall so low

There are countries with even larger landmass, and countries with roughly the same population, whose economies are doing worse than China, so I'm not convinced that landmass and population are fundamental requirements for economic prosperity. I should add that I'm not an economist in any shape or form and I'm happy to be proven wrong since I believe this is an interesting topic.

roenxi3• 7 years ago

There are countries with even larger landmass

Russia and Canada. I wouldn't want to call Canada an inhospitable frozen wasteland, but I'm happy to say that about Russia. I suppose on reflection China has a lot of deserts, but I suspect given the population difference that China has a massive edge on quality farmland.

If you look at the wiki page for landmass [0] China actually has a startling abundance of land and has 20% of the worlds population. It doesn't really have much competition on the land+people front.

With fundamentals that good, they really don't need to get much right to become a superpower. They needed to get something right, but realistically they aren't transparent enough for us to know what.

[0] https://en.wikipedia.org/wiki/List_of_countries_and_dependen...

nine_k• 7 years ago

There is exactly one country with a comparable populatuon, India. It's not doing exactly bad, too. The next largest country is USA, with roughly thee times smaller a population.

Most countries with larger landmass have most of its landmass barely usable due to climate: Russia, Canada, Australia, Algeria. Most others from top 10 largest countries are doing OK: USA, India, Brazil.

China has a unique combination of very long subtropical shorelines, a decent amount of arable inland, and a very large population.

addicted• 7 years ago

The population argument makes little sense. Chinese like Indians speak a multitude of languages and have very different cultures.

I don’t think there are 2 places in mainland US that have as distinct cultures as pretty much every region of China has from each other (primarily because everyone speaks English in the US, while people speak different languages in different regions of China).

RomanBob3• 7 years ago

To be a developed country you simply need 2 things. Average IQ >= 100, and a free market.

Every country that has these (north america, non-communist europe, japan, south korea, singapore, taiwan, hongkong, israel) is a developed country.

Every country that has not, is not.

Having oil helps a little, also.

qd6pwu43• 7 years ago

Your question is insightful. I think a major reason that China once fell so low is the Qing dynasty secluded itself from the outside world, and didn't catch up with the industrial revolution. So in 18xx-19xx, China was still an agricultural civilization and western countries have stepped into modern industrial form. And we know as to production efficiency, (non-modern) agriculture vs industry is like fist vs bombs. Besides, before 1911, China was still imperial, most people were not liberated and educated, so they can not effectively participate in industrial production (In some sense, being uneducated, they were not useful people). Now with 1.4 billion educated people, it's no wonder China is coming back to its normal place. And I believe today is not the end of China's rise, the Chinese people can do better as long as they continue working hard, especially on science and technology.

pmontra2• 7 years ago

This, and western countries exploited that weakness and turned China in a protectorate with actual warfare, etc.

iliketosleep• 7 years ago

1.4 billion educated people? China has made great progress in the area of education, but there is still a large percentage, especially from older generations and in rural areas, who never had any real educational opportunities (as you know, they were too busy fighting for survival).

Also, given that the current leadership is taking a very different path that that of Deng, why are you so optimistic that China's rise will continue? From my perspective, they seem to be alienating themselves once again, and straying from path to prosperity originally set by Deng.

roboys3• 7 years ago

China fell low thanks to external sabotage (opium) and espionage (stolen tea,spices,manufacturing processes) by 5+ of the future economic powers working together in the take down of the superpower. This attack and disruption of established Chinese/Indian trade routes allowed new Western industrial manufacturers to step in and supply the market.

The US/UK has had anti-Chinese policies since the early 1800s leading to the modern day (people we celebrate were some of the biggest opium dealers in the world). Teddy Roosevelt (inheritor of a drug dealing fortune) even used the Japanese to sabotage China again when he was president in 1900s when he authorized Japanese expansion into Asia with a secret treaty.

kerng3• 7 years ago

The only question is how they managed to fall so low that they weren't a competitive superpower.

Political issues. They might be the mighty sole superpower by now. Imagine the knowledge, passion and intelligence of all the people living there, and what they could have already achieved without being suppressed or held back.

mikeash2• 7 years ago

They were getting kicked around by other powers in the 19th century. Communism isn’t the explanation.

throw0101a3• 7 years ago

The only question is how they managed to fall so low that they weren't a competitive superpower.

Well, first of all, they had two thousand years autocratic Imperial rule. This was overthrown in 1912, but then came the Japanese invasion, then WW2, then a civil war.

The civil war ended up being won by a somewhat anti-intellectual group of people (the Communists) who had all sort of economic backwards programs (not to mention social upheaval by sending intellectuals to "re-education" camps).

As for the reason why things remained static during the Imperial rule: this was actually the norm for most civilizations. If you look the world in 1600, just before the invention of the telescope, Western Europe, the Ottoman's, the Mughals ruling in India, and Imperial China, weren't too different. The non-Europeans were actually ahead of the Europeans by some metrics.

Once the Scientific Revolution was embraced by the Europeans, and generally rejected by everyone else, the Euros left everyone else in the dust. The real question is: why were the Europeans the only ones to embrace it.

The book Intellectual Curiosity and the Scientific Revolution by Toby Huff explores this question. Highly recommended.

numakerg• 7 years ago

The real question is: why were the Europeans the only ones to embrace it.

I haven't read Huff's book so here's my stab in the dark. Europe has a lot of mainland coastline and the Mediterranean, which favors the formation of many small nation states and trans-Mediterranean trade. Among a large number of diverse and competing states, political, military and social ideas are more likely to be employed somewhere, and if successful, will rise to prominence within the local trade cluster by the process of natural selection.

If you have a large number of independent nation states, many of which import products and ideas from the far East, one of them is likely to put together a new military innovation that gives them an edge in warfare. Since the area sees frequent competition, other nations will quickly come into contact with the new technology and be forced to adopt it, or risk swift decline. A period of rapid innovation in metallurgy, chemistry and navigation (to name only a few) would develop a political culture that values technological development over traditional ideals.

I guess this would increase the demand for scientists/intellectuals and engineers. The total fund allocated by the political elite towards academics either through patronage or universities would increase the number of scientists in Europe. Ease of communication through mail channels and access to wider array of materials, both developed due to the increased volume of trade, would allow more scientists, to do more complicated research and exchange ideas more easily than ever before.

rwallace• 7 years ago

The only question is how they managed to fall so low that they weren't a competitive superpower.

Because for pretty much their entire history, anytime they tried to achieve anything, they were either conquered by an aggressive imperial power, stuck with a terrible repressive government, or both in rapid succession.

unscaled2• 7 years ago

To be fair, throughout most of history, as long as China was under unified rule, it was almost consistently had the largest GDP in the world for any political entity, usually amounting to 25% share of the global GDP.

Compared to their historical performance, China hasn't even reached its peak.

I'd say political turmoil and conquests didn't harm the Chinese economy that much, but political stagnation during the crucial 19th century did. It was first disinterest of the ruling class in international trade (admittedly this started much earlier), which effectively handed over a lucrative business to European powers, who could in turn outgrow China.

The same political stagnation, as long as losing their position of advantage, has made China completely miss out on industrialization which was a great multiplier for GDP growth. This explains how a smaller neighbor like Japan (which embraced industrialization and Western-style colonization) could quickly surpass China and threaten it.

odiroot• 7 years ago

anytime they tried to achieve anything, they were either conquered by an aggressive imperial power

It seems to me, the opium wars and the resulting partitioning was solely a fault of the Qing government. Sure, the Brits were big bullies but China was playing on a home field and could overpower invaders with sheer numbers.

Qing state was already breaking from inside by then. No wonder the didn't survive long after.

melling• 7 years ago

“I wouldn’t trust any article written in English...”

What if the article was written by someone from China?

“Zhang Jun is Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai-based think-tank.”

roenxi3• 7 years ago

Yes, even then. If I'm getting my information from English-publishing Shanghai think tanks then I'm just going to assume that I'm wrong.

I mean, I know how many contradictory economic opinions are generated by universities where I speak the language and have a reasonable grasp of the economic fundamentals and understand what the various interest groups want. It would be a special form of madness to assume I know anything but the most basic facts about China from a survey of internet articles.

echevil• 7 years ago

What if the article was written by someone from China?

Read the Chinese version then

07d046• 7 years ago

It's funny. I'd generally be more skeptical of an essay coming out of China because of China's ideological control. Few authors will argue contrary to the official narrative.

That said, here's another perspective on China's recent rise, translated from Chinese:

The argument is simple: when China joined the world economy in the reform and opening era, capital flocked to China to take advantage of low-wage labor and what Qin calls China’s “low human rights advantage,” i.e., the state’s commitment to development at any cost (land-confiscation, suppression of workers’ rights, exploitation of migrant workers, etc.). Over time, China became the “world’s factory,” producing quality goods at low prices, at the expense of jobs and tax revenues in the developed world previously inhabited by the capital that had now fled to China. Despite a surplus of capital and increasingly frequent labor shortages, the naked power of the Chinese state keeps the machine running, lending the profits back to the developed economies so that the “exchange” can continue. Such debts only intensify the crisis of the developed world, as governments are already attempting to supply more “welfare” to increasing numbers of unemployed despite a fall in tax revenues.

https://www.readingthechinadream.com/qin-hui-dilemmas.html

cltsang3• 7 years ago

Exactly. The language of the article itself doesn't affect on the content or the credibility.

If anything, the Chinese government has higher incentive to clamp down the Chinese version as Chinese content has a wider reach and thus higher impact on the local people.

RomanBob3• 7 years ago

Communism.

Any society with majority chinese population (singapore, taiwan, hong kong) that has a free market is a modern developed country. China stuck behind for 50 years, and is now catching up.

unscaled2• 7 years ago

Communism was a roadblock, but China's relative decline (which really just means stagnation) started back during the Qing dynasty in the 19th century.

Barrin92• 7 years ago

There are plenty of countries without any communist history that are in much worse shape than either China or Russia, so this can hardly be a sufficient explanation.

jimmydef• 7 years ago

how they managed to fall so low

I'm amazed that in so many English discussions about China's fall since the 17th century, there are absolutely zero mentions of the Manchus. On the other hand, read any Chinese discussion on it and you'll always see the Manchu domination popping up as a reason if not one of the main causes.

The Manchus took advantage of internal strife within the Ming dynasty during the 17th century and conquered China after the last Ming emperor killed himself when rebels surrounded the palace and a Ming general let them through the Great Wall.

The problem with the Manchus is that they were semi agrarian/semi nomadic and had very little desire for technological progress. Unlike the Han Chinese who always had to frequently rely on technology to overcome the nomads on horseback from the North, the Manchus only believed in horseback and arrows. In fact the late Ming had more natively produced cannons than the Qing dynasty had during the opium wars hundreds years after. Even the western expansion wars conducted by the Qing dynasty early on had gunpowder teams that were only staffed by the Han Chinese because the Manchus initially looked down on guns and cannons.

Lastly the administration was sclerotic because a minority group of 1% was supreme over the other 99%. The Manchus/Mongols/Tibetans owned most of the land in China during the Qing dynasty even though they were a tiny minority. The Manchu/Mongol/Tibetan officials were also of higher status than the Han Chinese. During imperial court, the Qing dynasty had two sessions. After the first one, the Han Chinese had to leave because they were not trusted. In fact up until the late Qing dynasty when the Qing dynasty was ravaged by foreign powers, senior court officials even mentioned to give China to its friends (Europeans/Japanese) rather than give it back to their slaves (the Han Chinese).

This is not to say the Manchus were the only reason for China's downfall (in fact the Ming had started to stagnate a little), but they were absolutely a very large part of it. What many non-Chinese think about Chinese today are actually from the Manchus. The Qipao, the pigtail (Manchu Queue), etc.

xxxpupugo• 7 years ago

The article mentions, China for the first part of 20th century, and before 1980s, isn't a stable country.

Qing government is overthrown at 1911, which follows by a loose governance of various warlords, and KMT merely reins the power to control them. Before stuff can get better, the Japanese invasion happens, drags China into even bigger misery well into 40s. Tens of millions people died in WWII. After WWII, the Chinese Civil War happens immediately between KMT and CCP, with CCP ascending to power after 4 years.

At this stage, China finally regains a strong central government as it usually does in its history. Unfortunately, Mao is an ideology fueled dictator, who knows nothing about economy development. So China missed the golden age of economy and technology development worldwide before 80s. When its leader finally comes to sense, the world is a far different place than they would want to admit, and China is way behind already and have so much to catch up.

After which, it does something right about itself. Cheap affordable, mass education offered to its populace. Student loan was unheard of in China (not sure it is still case nowadays). And freedom to do business is offered to its citizens, and they are encouraged to get rich by the party. CCP would like to claim all the credits, but in reality it is mix of everything, it does something right, but more like catalyst that starts something even beyond its own imagination, driven by the desire of one billion people to seek a more abundant life.

Yes, I think what really happens in China today is that it finally comes back at the world stage, not as a catch-up, but as a player, with its own pros and cons.

Such coming back should be regarded as the normal of the world order, but I guess it will have to earn the status before the rejection from the post cold war, western liberal order is significantly weakened or defeated.

ztratar• 7 years ago

"Yet this process of economic liberalization and structural reform is also uniquely Chinese, insofar as it has emphasized local-level competition and experimentation, which in turn have supported bottom-up institutional innovation. The result is a kind of de facto fiscal federalism – and a powerful driver of economic transformation."

I'm not entirely sure what this means. The article that is referenced by the author is behind a pay-wall, and doesn't explain it in the top paragraphs.

How has the Government encouraged this local competition? By all means the examples he gives are all technology companies that have primarily benefited from 1) copying US tech companies strategies, 2) stealing their IP, and 3) not having to substantially compete with US companies because of tech restrictions, the Great Firewall, etc.

None of that is economic liberalization in the slightest.

i_am_proteus• 7 years ago

Yes, but that IP theft is more often done by local entrepreneurs (moving the factory out from under a foreign company) as it is the state.

kristianov• 7 years ago

Regarding Chinese economic liberalization, it's mostly happening in the country and villages.

I would recommend you to read Steven Cheung. https://en.wikipedia.org/wiki/Steven_N._S._Cheung#Selected_b...

adinobro• 7 years ago

The article does not do a really good job at explaining what the government it doing but basically it is:

1. Creating competition between states/cities (Beijing vs Shanghai) which has similar advantages to the free market EVEN if both groups are part of the government. This tries to reduce waste and puts natural pressure on companies (including ones that are state owned).

2. Encouraging close proximity (like silicon valley) by using grants, lower taxes, etc. This encourages lots of companies in the same industry to be close together and often in the same building. This encourages transfer of ideas and staff between companies. (economic development zones)

3. Limiting the number of economic development zones so that they are not all over the place.

To just ignore anything that Chinese companies have done and say it is all stolen or copied is rather biased.

Alipay and WeChat are probably the easiest example to look at. They both started very different (WeChat was just a copy of What's App, which is a copy of MSN messenger, which is a copy of AOL messengers, which is a copy of IRC which is a copy of netsend, which is a copy of telegrams, which is a copy of smake signals, etc... - everything is based on what came before it)

Slowly based on competition with each other they have stolen each other features and now do basically the same things. Forget about America (Facebook keeps copying features from WeChat).

Hope this helps to explain what the article does not explain.

red_admiral• 7 years ago

To just ignore anything that Chinese companies have done and say it is all stolen or copied is rather biased.

Upvote.

From talking to Chinese students overseas, it seems to me like Weibo and the like are actually ahead of FB/Twitter in many ways, including a functioning and scalable micropayment system. Sure, government support might be helpful, but you couldn't run anything of that kind and at that scale without some of the best tech people in the world.

RavlaAlvar3• 7 years ago

Just in recent years China has decided to tighten its grip on private corporation, it's clearly i the government doesn't have any Desire for structural Reform and further economic liberalization.

RavlaAlvar3• 7 years ago

Also, we shouldn't forget that since the economic reform of 1978, China has adopted the policy of intentionally escalating wealth inequality.

Please do not forget billions of worker/farmer in China still live in a third world condition, so that the upper 10% can live their bourgeois life.

seanmcdirmid7• 7 years ago

Maybe you meant millions instead of billions?

hungryhobo• 7 years ago

The way you framed it is a bit disingenuous. The reasoning behind the policy is that the government recognizes that China back then severely lacked any modern industrious knowledge. In order to quickly catch up, China decided to pour all its resources into a couple provinces that either had existing industrious base left over from foreign occupation or had strategic locations. As well as sending the best people over seas hoping to gain whatever knowledge necessary to kick start the economy. And it's not like the government simply forgot about the billions of farmers, one of the top priority for officials are poverty alleviation. It's a key kpi for any promotion within the government.

Now you could argue the implementation is not perfect, but given the situation back then I agree with this policy, and I'd be interested to hear how you would approach this differently.

RavlaAlvar3• 7 years ago

I am not saying Deng's approach is bad. I am just trying say that we shouldn't forget that a huge truck of China GDP comes from the exploitation of the workers.

Now that the level of inequality has reached the moon, I am curious to see what they will do next. Especially in the age automation and increasing trade war tender, manufacturing WILL leave China. Many in the US blame the rise Trump on the lost blue collar jobs. Imagine the same situation in China, but with majority of population being blue collar worker.

Let's also not forget about corruption in China. It is true that elimination of porvery is an important goal set by the central state. But how the local official achieve their target KPI is abhorrent, e.g. forcing low income family out of the city, manipulate the definition of poverty etc.

cltsang3• 7 years ago

So are you challenging trickle down economics? That's debatable.

I believe at least at the early stage capitalism trickle down economics works. However, without proper checks and balance system, corruption brought by power and wealth does stop the trickle down effect.

Therefore in China where corruption is an accepted norm, it's doomed to fail. That was not originally planned though.

Maybe that's also why recently the CCP has been trying so hard to abolish religions, to keep the people's moral standard low.

alexgmcm• 7 years ago

Maybe that's also why recently the CCP has been trying so hard to abolish religions, to keep the people's moral standard low.

Is there any evidence that religion actually increases the 'moral standards'?

This paper[1] suggests not:

Religious and nonreligious participants did not differ in the likelihood or quality of committed moral and immoral acts.

[1] Hofmann W. et al. (2014), Morality in everyday life, Science. https://www.ncbi.nlm.nih.gov/pubmed/25214626

nabla9• 7 years ago

I believe at least at the early stage capitalism trickle down economics works.

What is the basis of your belief?

I hope you understand that there is no thing in economics called "trickle down economics" or "trickle-down theory". It was term invented by Will Rogers as a joke to mock tax reduction policies that benefit the rich. Conservative politicians and pundits adopted this non-existent theory meant to mock them and magically people started to believe that it's a real theory that exists.

Only evidence of tax cuts helping comes from tax cuts for the poor who spend the money and don't invest, thus increasing the economic activity. https://www.journals.uchicago.edu/doi/abs/10.1086/701424 Trickle down has no evidence or theory to support it.

There is related real concept called supply-side economics, but it's also widely discredited by economists, including those who worked for Reagan like Mankiw. I think only handful of economists support it today.

newsgremlin• 7 years ago

If the western economies were truly trickle down, the bucket at the top would be empty by now. However, the source of the trickle has become more sealed over time, and thus the inequality gap grows.

INGELRII2• 7 years ago

China has achieved poverty reduction unparalleled in human history. In 1981 around 88% of the Chinese population lived in extreme poverty. It has now declined into 2%. This happened parallel to the extreme increase of inequality. China has experienced a modest decline in inequality since 2008 as the economic growth has hit into trouble. 2/3 of the world poverty reduction between 1990 and 2005 was because of China.

Increase of inequality can't have increased poverty, but maybe you argue that it could have been reduced even faster and China didn't break records fast enough.

40acres• 7 years ago

Solid article, I’ve underestimated the liberalization of the Chinese economy, especially in regards to technology and advanced manufacturing. Anyone know what the proverb means?

ninju• 7 years ago

"On a journey of a hundred miles, 90 is but halfway"

The closest I could find (via googling) is this saying - "Walking 100 Miles: Stopping at 90 miles, is the same as stopping half-way" which means being 90% done with something is the same as being 50% done - you're not done!

https://www.orientaloutpost.com/shufa.php?q=walking+100+mile....

whenchamenia• 7 years ago

Its basically an akward (in english) rephrasing of the common "the last 10% is the hardest" concept. Also with the implied value proposition that a job 90% done is at best worth 50% of a finished one.

INGELRII2• 7 years ago

(I'm just an interested amateur who reads a lot so take everything I say below with a grain of salt. I also leave things out for brevity)

Deng Xiaoping (1904–1997) should still get credit for most of what is happening now. China had multiple paths it could have followed when Deng took over, but he was a clever fellow. He made several gradual alternations to rigid socialist and Marxist doctrine and authoritarianism that separated Chinese communism from all others others. He was able to keep hardliners at bay.

1. He declared that: "Socialism means eliminating poverty. Pauperism is not socialism, still less communism." Before Deng all communist countries justified poverty and suffering of the masses as necessary part of struggle towards communist utopia. Deng threw this rationalization away. He essentially adopted the same measure stick to success as capitalism.

2. Deng recognized stuff that worked outside government. 18 households in Xiaogang Village started land reform after a serious drought in secret in 1978 and it started to spread. It was against government rules and even against party doctrine. Instead of prosecuting people Deng endorsed it. Successful land reform has been the starting point for other successful Asian countries as well (see Studwell's "How Asia Works").

3. More meritocracy and checks and balances within the communist party. Before Deng, China was always gravitating towards typical strong man communist dictatorship. There was one dictator on the top and power and orders flowed downwards. Deng adjusted the rules. Government officials were moved to work in different regions from where their personal contacts were (and opportunities to corruption were reduced). Princelings still got into powerful positions but talented newcomers also had a change. There was clear movement towards meritocracy and accountability within the communist party.

After Tiananmen Square protests of 1989 Deng's power started to wane and hardliners gained more power. The momentum of his institutional reforms has carried on but there is constant erosion. The current leader Xi seems to be a typical strongman who tries to get more and more power to himself and his inner circle and this may end all momentum for China that Deng Xiaoping created.

baybal2• 7 years ago

China has a cheap and easy, but hard politically recipe for growth: let loose of some state companies, industries and instantly record a net benefit from increased productivity.

And China still has lots and lots of state companies to put on the market, so they are nowhere near the end of the runway. The problem is that all what is left is so much entrenched with vested interests, touching them is a political bloodbath.

anonu• 7 years ago

Western society rose to prominence because of a few values: respect for property rights, intellectual property and personal freedom. America is far from perfect but was based on these ideals.

It's maybe a simplistic view of the world and East vs West... But the recent HK protests can be rationalized through this lens.

I think respect for intellectual property and human rights will determine whether China continues it's march forward or not...

dragonsh• 7 years ago

Western societies rise to prominence is due to acceptance of scientific temperament with a balanced moral view looking beyond religion and tribal mentality. They challenged the established religious groups and tribal rules. Traveled across oceans and built global trade. Property rights and all you described are just means which are just subservient not the main reason.

China is moving forward due to the same scientific temperament, may be need to supplement more moral education to build a balance. But that's a normal process given it took out 1.4 billion people out of poverty and making them one of the largest middle income economy and slowly moving towards developed.

You can see an example in India where all values you described are part of its constitution (probably the only nation where there is a chapter on human rights in its Constitution) and government proclaim to protect it. Still has one of the highest poverty levels in the world. India needs more scientific temperament to come out of its religious tribal mentality and need more science education.

The problem you described of Hong Kong is its own making where people accepted living in prison cell size house and rely on get rich quick scheme when China was closed which doesn't work anymore. So it's just paying the price of its own choice.

roboys3• 7 years ago

It's actually a lot simpler, stealing gold works.

It's old fashioned but they extracted $45 trillion from India alone, think about how much was taken from Africa and China....also at it's peak opium deals in China accounted for 35% of the UK's GDP (expect similar numbers in the US)...

Explanations of western growth that exclude economic history seem suspicious to me, a lot of the true story & criminality is hidden in the numbers.

Of the few ways to avoid the Malthusian trap, the West did it by robbing people at gun point.

throw0101a3• 7 years ago

It's actually a lot simpler, stealing gold works.

Except how did the West get into a position of being more powerful than the rest of the world?

Around 1600, Western countries, the Ottomans, Mughal-ruled India, and Imperial China weren't too different in development (the non-Euro folks could actually have been considered more developed). By the late-1700s / early-1800s the Europeans were steamrolling over everyone.

What changed in those ~150 years?

A good book on the topic is Intellectual Curiosity and the Scientific Revolution by Toby Huff:

* https://www.cambridge.org/9780521170529

It explores an interesting accidental historical experiment: the telescope was invented in 1608 in the Netherlands, and in the next ~20 years had spread to most of the world's major civilizations. What various cultures did with it (or not) explains why Europe took off.

See also The Rise of Early Modern Science: Islam, China and the West by the same author:

* https://www.cambridge.org/9781107130210

China’s liberalization and structural reform drives growth

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