Chinese Economics Thread

[PanAsian]

I think the disconnect here is that we are talking about two different kinds of success.

@Hendrik_2000 and @Tse are referring to personal success, where one makes money, provides for their family, and maybe build some legacy for the kids.

@taxiya, @plawolf, and I are talking about national success, which is a different matter altogether.

Yes, I would agree that in personal success, the culture of overseas Chinese plays a big part. We value education, good work ethics and familial bonds, which allows us to achieve financial success over generations. However, personal success does not necessarily translate into national success. Just because our culture enable us to do well as immigrants, does not mean that same culture will necessarily make China, as a nation, succeed.

I can understand that, as immigrants whose family left China before the founding of the PRC, some of you may not be very familiar with the developmental path of modern China, but I can assure you, China's success today is built not upon culture, but upon policy.

First is the policy of land reforms. While it did lead to the great famine of the 60's, it also empowered hundreds of millions of Chinese who previously lived under the whims and mercies of their landlords. This empowerment allowed the creation of a vision, THE vision, of a modern China where everyone is equal. It might sound trite and cliché today, but in 1949, it was an utopian dream. Without this vision, modern China would not have been possible. This was what Sun Zhongshan sought to achieve, but he never succeeded in spreading this vision beyond the intelligentsia. Mao's greatest contribution to Chinese history is the spread of this vision to every Chinese citizen, and it would not have been possible without those land reforms.

Second is the policy of "Two Bombs and one Satellite". In the deepest throes of the Cultural Revolution, the government decided to pursue these three highly ambitious scientific programs. The success of these programs assured China's military security, and kickstarted China's scientific expertise. In only 10 years, China went from digging in the dirt to sending satellites into space!

Third is the policy of market reform initiated by Deng Xiaoping. I believe we are all familiar with its results, and I needn't explain those further.

Those are just the major, landmark, policies. Aside from them, there are countless smaller policies and initiatives that built China into what it is today. It was not Chinese culture that initiated and then implemented these policies, it was the existence of a strong, central authority, and the support and belief of an empowered Chinese population.

I would just tweak it a little to say that Sun Zhongshan, the Nationalists, select warlords, reformers, activists, and rebels of many stripes from the late-Qing onwards contributed more to today's China's success than you give them credit for. China needed so much practical change that it took all these varied Chinese people all that time and effort to facilitate the situation to be workable for the Communists to eventually successfully carry out their part of the needed change for China, notwithstanding the conflicts among all these groups. Chinese culture and identity is the underlying unifying factor throughout that ongoing process.

 

[PanAsian]

Empires and people's rise and fall is due to human nature itself. People work hard and sacrifice and they reach the top. After being at the top for a while they become lazy, decadent, arrogant and they begin taking things for granted and they will begin to fall. This has nothing to do with culture, race, religion, politics or ethnicity but its due to the fact that we are humans and its part of our DNA. No one escapes from it.

Don't forget greed!

 

[taxiya]

I would just tweak it a little to say that Sun Zhongshan, the Nationalists, select warlords, reformers, activists, and rebels of many stripes from the late-Qing onwards contributed more to today's China's success than you give them credit for. China needed so much practical change that it took all these varied Chinese people all that time and effort to facilitate the situation to be workable for the Communists to eventually successfully carry out their part of the needed change for China, notwithstanding the conflicts among all these groups. Chinese culture and identity is the underlying unifying factor throughout that ongoing process.

True, we all stand on the shoulders of our predecessors regardless their achievement. Needless to say, Sun Zhongshan is regarded as the forerunner of Chinese revolution by the Communist party. Every year during the October 1st National Day, his portrait will be standing in Tiananmen square looking at Mao's portrait. I don't think he enjoys any higher regards anywhere outside of China today.

[the following is not reply to you, but to take the oppotunity when we talk about Sun Zhongshan]

Contrary to the honesty of CCP, many oversea Chinese (and I will be frank that includes @Hendrik_2000) has demonstrated the opposite. On the one hand, they are enthusiastic of recent achievements of China, on the other hand they constantly dismiss the fact that these achievements are built on the ground that CCP has been laying down since 1949. Many achievements are directly made by CCP members and SOEs, like the rockets, satellite, HSR, Super computers and all the military gears people here talks about. Standing on the shoulder of a giant and being proud of it while stomping the giant is not honest.

History can not be IFed, it is just that simple. For example, we can not IF away Qing's failure at its end, but we must not forget it is Qing realized the direct and firm rule over many regions of morden day China, the credit goes to Qing. ROC inherited that, experimented many ways to save China but all failed, CCP is one of the many experiment during that time which turned out to be successful. That is the choice of hitory, not a random event to be dismissed. CCP has demonstrated its courage to put Sun Zhongshan as their forerunner, that is the reason that they are leading China, not anybody else. So long as they keep that courage and honesty, they have the mandate.

 

[Hendrik_2000]

Totally agree, it is the different perspectives that leads to the disagreement.

Oversea Chinese migrant see personal, community tradition and ethic as the whole thing of culture, a narrow definition. From this point, people see culture as the sole reason for their success compared with other people around them, because that culture is the only difference. People also limit the scope to a few generations after their ancestor settled in the foreign countries, and they only see "going upwards".

Chinese citizens in China, on the other hand, see extra things as part of culture (broader definition), the institution, the machinery of the state that connect every community and individual. That part of culture has evolved over continuously for thousands of years. From this perspective, Chinese see not only the recent raising of China, but also constantly reminded by the failing of China every 300s years. Then the picture is all different from oversea Chinese, we see chaos, defeat and disasters as well as glories. It is this experience and awareness that Chinese dismiss the notion of culture supremacy.

That is not without saying Personal ambition, drive , hard work can only go so far. Overseas chinese prosper because it was supported by the frame work of colonial government that encourage wealth accumulation
The colonial government provide the frame work of peace, stability, personal ownership , relatively fair and just law
But government by itself cannot provide wealth and prosperity
I will provide you with the data from world bank

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From 1960 to 200o China GDP hardly change at all why? You said that government is the primary drive of prosperity. From 1950 to 2000 China HAD a government though not function very well

I know what is the problem because government micro manage people life Why should I work hard when I cannot open a business or I will be paid the same regardless of how much I work
Since I am told where to live or work why should I have initiative ? . It encourage culture of dependency
If you divide a pie equally among so many people than everybody only get very small piece of pie. You better off making the pie bigger first

It is the genius of DXP who release the creative energy of Chinese people by saying It is ok to get rich and some people will get rich first you just wait for you turn.You do what want to do and I am not taking care of you like before . You have to depend on yourself. It must be hard for him to do that but he has the stature and prestige to make that difficult decision

With that stroke of pen he start the march to prosperity.
No government cannot make people rich it is the people themselves who is responsible for their well being

Culture does make a difference you can see it now in China where the economic power house are the southern provinces of Zhejiang, Guangdong, Jiangsu, Fujian, etc Mind you they have the lead. they start first with reform and has relatively developed economy from being the port treaty.

But most northern province were the favorite of PRV after the liberation Most of the heavy industry are located in the northern province of Jilin, Shandong, Liaoning, Beijing area And they were lavish with government investment
Anshan steel, Shenyang aircraft, FAW, etc. Most of the southern provinces are neglected specially Fujian nothing were built there because it can become battle field. But the southern Chinese has enterprising spirit

Or for that matter why only the "chop stick" countries in Asia that prosper why not Mongolia, Cambodia, Laos, Myanmar, Indonesia, Philippine?

Nobody answer my question sofar

 

[Hendrik_2000]

True, we all stand on the shoulders of our predecessors regardless their achievement. Needless to say, Sun Zhongshan is regarded as the forerunner of Chinese revolution by the Communist party. Every year during the October 1st National Day, his portrait will be standing in Tiananmen square looking at Mao's portrait. I don't think he enjoys any higher regards anywhere outside of China today.

[the following is not reply to you, but to take the oppotunity when we talk about Sun Zhongshan]

Contrary to the honesty of CCP, many oversea Chinese (and I will be frank that includes @Hendrik_2000) has demonstrated the opposite. On the one hand, they are enthusiastic of recent achievements of China, on the other hand they constantly dismiss the fact that these achievements are built on the ground that CCP has been laying down since 1949. Many achievements are directly made by CCP members and SOEs, like the rockets, satellite, HSR, Super computers and all the military gears people here talks about. Standing on the shoulder of a giant and being proud of it while stomping the giant is not honest.

History can not be IFed, it is just that simple. For example, we can not IF away Qing's failure at its end, but we must not forget it is Qing realized the direct and firm rule over many regions of morden day China, the credit goes to Qing. ROC inherited that, experimented many ways to save China but all failed, CCP is one of the many experiment during that time which turned out to be successful. That is the choice of hitory, not a random event to be dismissed. CCP has demonstrated its courage to put Sun Zhongshan as their forerunner, that is the reason that they are leading China, not anybody else. So long as they keep that courage and honesty, they have the mandate.

I am not dismissive of CCP I admire the early year of CCP 1950 to 1960 when they start the reconstruction of China using just sweat power to industrialize and built school, hospital, road, railway, dam, heavy industry, empowering woman,land reform etc It is epic effort
I still like the "propaganda song of that period"
During this time 120,000 overseas Chinese return to China to build "new China" But what they got ?They are accused of being a spy. capitalist roader and hounded down. Many left China after CR and take refugee in Hongkong There are still there half million of them

But from then on they erred in big way by micromanaging people life, going into hair splitting, ideology infighting and disregard the economy in the name of ideology purity
Obsession with dogma etc. thrashing the traditional Chinese culture
It kept China poor and ignorant. we shake our head what is going on Where is the pragmatic and practical Chinese that we know and valued!

it is not until DXP come to power that China come to their senses and they still pay for that 3 decades of lost years You see in the semiconductor fight goin on now
60's is the incubation time of semiconductor while in China they hols useless meeting of ideology purity. Now 50 years on China still pay for those lost time
Yo cannot build semiconductor overnight if you are so behind!

 

[Hendrik_2000]

Empires and people's rise and fall is due to human nature itself. People work hard and sacrifice and they reach the top. After being at the top for a while they become lazy, decadent, arrogant and they begin taking things for granted and they will begin to fall. This has nothing to do with culture, race, religion, politics or ethnicity but its due to the fact that we are humans and its part of our DNA. No one escapes from it.

What we are debating here is" Does culture play a role in country economic progress" As the professor said in the article. Empirical evidence certainly point to that direction.
It has nothing to do with rise or fall of empire

 

[solarz]

From 1960 to 200o China GDP hardly change at all why? You said that government is the primary drive of prosperity. From 1950 to 2000 China HAD a government though not function very well

I know what is the problem because government micro manage people life Why should I work hard when I cannot open a business or I will be paid the same regardless of how much I work
Since I am told where to live or work why should I have initiative ? . It encourage culture of dependency
If you divide a pie equally among so many people than everybody only get very small piece of pie. You better off making the pie bigger first

It is the genius of DXP who release the creative energy of Chinese people by saying It is ok to get rich and some people will get rich first you just wait for you turn.You do what want to do and I am not taking care of you like before . You have to depend on yourself. It must be hard for him to do that but he has the stature and prestige to make that difficult decision

With that stroke of pen he start the march to prosperity.
No government cannot make people rich it is the people themselves who is responsible for their well being

Culture does make a difference you can see it now in China where the economic power house are the southern provinces of Zhejiang, Guangdong, Jiangsu, Fujian, etc Mind you they have the lead. they start first with reform and has relatively developed economy from being the port treaty.

But most northern province were the favorite of PRV after the liberation Most of the heavy industry are located in the northern province of Jilin, Shandong, Liaoning, Beijing area And they were lavish with government investment
Anshan steel, Shenyang aircraft, FAW, etc. Most of the southern provinces are neglected specially Fujian nothing were built there because it can become battle field. But the southern Chinese has enterprising spirit

Or for that matter why only the "chop stick" countries in Asia that prosper why not Mongolia, Cambodia, Laos, Myanmar, Indonesia, Philippine?

Nobody answer my question sofar

You say Chinese GDP from 1960 to 2000 hardly changed, yet the market reforms were initiated in 1980s. That runs against your claim that the Chinese government did not function very well before 2000.

When you're sick, and the doctor gives you a medication, do you immediately get better after taking it? Of course not. You have to go through a period of recovery where, even though you still look and feel sick, your body is actually healing itself. Same thing with China in the 20th century. The founding of the PRC was the cure, and the 50 years since, the recovery period.

Just like all medications have side effects, Deng Xiaoping's reform policies was not without their own risks. The June 4th incident was the direct consequence of a changing economy, and had Deng not acted decisively in sending in the troops, China might well have gone on to follow Russia's path.

What you are offering now is hindsight fallacy. Even Deng himself did not know how his reforms would turn out, or even how exactly they would carry it out. His famous adage was "crossing the river by feeling the stones".

Shanghai is the biggest city by GDP in China, with Beijing running second, Hong Kong third, and Guangzhou fourth. I am Shanghainese, and I can tell you with certainty that "enterprising spirit" did not exist in Shanghai in the early 80s. Most people were securely employed, stores and services were government run. It was only with the closure of state-run factories, and the massive loss of employment that followed, did people start going into business. Their "enterprising spirit" was not cultural but forced upon them by changing circumstances.

As for your question why certain countries in Asia prosper but not others, you are simply cherry-picking your criteria. I'm not sure what your definition of a "chop stick country" is, but Mongolia has a higher per capita GPD than Vietnam, and Vietnam definitely uses chop sticks.

 

[solarz]

I am not dismissive of CCP I admire the early year of CCP 1950 to 1960 when they start the reconstruction of China using just sweat power to industrialize and built school, hospital, road, railway, dam, heavy industry, empowering woman,land reform etc It is epic effort
I still like the "propaganda song of that period"
During this time 120,000 overseas Chinese return to China to build "new China" But what they got ?They are accused of being a spy. capitalist roader and hounded down. Many left China after CR and take refugee in Hongkong There are still there half million of them

But from then on they erred in big way by micromanaging people life, going into hair splitting, ideology infighting and disregard the economy in the name of ideology purity
Obsession with dogma etc. thrashing the traditional Chinese culture
It kept China poor and ignorant. we shake our head what is going on Where is the pragmatic and practical Chinese that we know and valued!

it is not until DXP come to power that China come to their senses and they still pay for that 3 decades of lost years You see in the semiconductor fight goin on now
60's is the incubation time of semiconductor while in China they hols useless meeting of ideology purity. Now 50 years on China still pay for those lost time
Yo cannot build semiconductor overnight if you are so behind!

First, your timelines are off. Deng Xiaoping came to power after the Cultural Revolution, in 1977. You say you admire the early years of 1950 to 1960, that gives you only 17 years in between, not 30. Not that I'm quibbling over numbers, but you need to clarify what eras you are referring to as the "lost years".

Second, the Cultural Revolution was a civil war. It was Mao's biggest sin, and a result of power struggles in the CCP. It was a human tragedy, but both the CCP and the Chinese people came out of it stronger. It was the aftermath of the Cultural Revolution that propelled Deng to power, and allowed him to initiate the reforms, and it was the years spent in farms and villages that drove the youths of that generation, my parents' generation, toward valuing education and hard work. It was that generation that built China's economic success today.

 

[Hendrik_2000]

You say Chinese GDP from 1960 to 2000 hardly changed, yet the market reforms were initiated in 1980s. That runs against your claim that the Chinese government did not function very well before 2000.

When you're sick, and the doctor gives you a medication, do you immediately get better after taking it? Of course not. You have to go through a period of recovery where, even though you still look and feel sick, your body is actually healing itself. Same thing with China in the 20th century. The founding of the PRC was the cure, and the 50 years since, the recovery period.

Just like all medications have side effects, Deng Xiaoping's reform policies was not without their own risks. The June 4th incident was the direct consequence of a changing economy, and had Deng not acted decisively in sending in the troops, China might well have gone on to follow Russia's path.

What you are offering now is hindsight fallacy. Even Deng himself did not know how his reforms would turn out, or even how exactly they would carry it out. His famous adage was "crossing the river by feeling the stones".

Shanghai is the biggest city by GDP in China, with Beijing running second, Hong Kong third, and Guangzhou fourth. I am Shanghainese, and I can tell you with certainty that "enterprising spirit" did not exist in Shanghai in the early 80s. Most people were securely employed, stores and services were government run. It was only with the closure of state-run factories, and the massive loss of employment that followed, did people start going into business. Their "enterprising spirit" was not cultural but forced upon them by changing circumstances.

As for your question why certain countries in Asia prosper but not others, you are simply cherry-picking your criteria. I'm not sure what your definition of a "chop stick country" is, but Mongolia has a higher per capita GPD than Vietnam, and Vietnam definitely uses chop sticks.

Chinese reform go in stages It is not a big bang like in Russia I agree with that. My argument is Government DOES NOT CREATE WEALTH once again. And Yes it does not function well because it HAS NOT implement all the reform I was in Beijing in 1995 and I know at that time private home ownership is still rare . Most people still live in assigned government apartment. Though reform was initiated in 80's It is only in planning stages . I remember vividly in 1985 Chinese government ask Singapore to help them with planning for SEZ(special economic zone) that latter become the template for Country wide reform in investment,finance , taxing, infrastructure development, private ownership of business etc, etc
Dr Goh Keng Swee spend the next 7 years assisting the Chinese government with that planning That show though it was initiated in 80 it was not fully implemented until late 90's.

Yes Vietnam is one of the chopstick country and yes Vietnam GDP percapita is lower than Mongolia. But there are many reason for that
1 Vietnam is in constant war from 1955 to 1975 practically. All the infrastructure was literally obliterated
2 Then they drove off the overseas Chinese merchant class Remember the "boat people" They are mostly overseas Chinese
3 Their patron Soviet Union implode in 80's and they fought war with China which is devastating to their economy until they can take it anymore and make peace with China retreating from Cambodia
4 Vietnam was very late in reform Doi Moi or Vietnam reform does not kick in until 1986
5 It is just simple division Vietnam GDP is 220 billion $ divide by 97 million you got roughly $2300
Mongolia only has 3 million people with GDP of roughly $ 11 billion you got roughly $3000

But Vietnam economy is on the upswing now every one know it and they attracted a lot of Japanese and Chinese investment. I have no doubt that in the future they will join the other "chop stick"country
Specially now that trade war begin many people are moving simple assembly line factory to Vietnam even Chinese owned

 

[solarz]

Chinese reform go in stages It is not a big bang like in Russia I agree with that. My argument is Government DOES NOT CREATE WEALTH once again. And Yes it does not function well because it HAS NOT implement all the reform I was in Beijing in 1995 and I know at that time private home ownership is still rare . Most people still live in assigned government apartment. Though reform was initiated in 80's It is only in planning stages . I remember vividly in 1985 Chinese government ask Singapore to help them with planning for SEZ(special economic zone) that latter become the template for Country wide reform in investment,finance , taxing, infrastructure development, private ownership of business etc, etc
Dr Goh Keng Swee spend the next 7 years assisting the Chinese government with that planning That show though it was initiated in 80 it was not fully implemented until late 90's.

Government does not create wealth? I'm sorry, but what do you think those SOEs do? Doing oil exploration is not creating wealth? Managing finances is not creating wealth? Building HSR lines is not creating wealth? How about providing health care, education, and child care? Entertainment? Telecommunications? Space exploration?

Yes Vietnam is one of the chopstick country and yes Vietnam GDP percapita is lower than Mongolia. But there are many reason for that
1 Vietnam is in constant war from 1955 to 1975 practically. All the infrastructure was literally obliterated
2 Then they drove off the overseas Chinese merchant class Remember the "boat people" They are mostly overseas Chinese
3 Their patron Soviet Union implode in 80's and they fought war with China which is devastating to their economy until they can take it anymore and make peace with China retreating from Cambodia
4 Vietnam was very late in reform Doi Moi or Vietnam reform does not kick in until 1986
5 It is just simple division Vietnam GDP is 220 billion $ divide by 97 million you got roughly $2300
Mongolia only has 3 million people with GDP of roughly $ 11 billion you got roughly $3000

But Vietnam economy is on the upswing now every one know it and they attracted a lot of Japanese and Chinese investment. I have no doubt that in the future they will join the other "chop stick"country
Specially now that trade war begin many people are moving simple assembly line factory to Vietnam even Chinese owned

My point exactly. Every country has their own reasons for being where they are. As for Mongolia, they have vast natural resources living next to the most populous country in the world. Sooner or later, they're gonna realize making money is more important than hanging on to old hatreds.