For about three decades, Steven N.S. Cheung, one of most famous Chinese economists, has been applying his advanced knowledge toward analyzing the Chinese economy. Moreover, he has made very accurate predictions about China’s economic development trends.

Steven N.S. Cheung

In 1960s and 1970s, Mr. Cheung established himself as an important figure in the western world’s academic community by publishing a series of highly-acclaimed economic papers such as The Theory of Share Tenancy, The Structure of a Contract and the Theory of a Non-exclusive Resource, The Fable of the Bees: An Economic Investigation, A Theory of Price Control and Property Rights and Invention.

In 1978 Cheung spent 3 months writing The Myth of Social Cost, a book dealing with property rights and transaction costs, for the Institute of Economic Affairs in Britain. The next year, right after the Chinese authorities decided to adopt the opening up and reform policy, he toured around the Chinese mainland. Cheung was quite stunned by incredibly low working efficiency and backwardness on the mainland during that time. Meanwhile, he noticed that commodities were available on the black markets; some people were earnestly seeking business opportunities; others could access Chinese translations of economic classics, such as Adam Smith’s The Wealth of Nations, Paul Samuelson’s Economics and Milton Friedman’s Capitalism and Freedom.

Over the next two years, he completed Will China Go Capitalist? He expressed optimism in his book about China’s future by stating that the Chinese pendulum began its return swing with force and momentum and that China must, in the long run, induce a demand for institutional change. In addition, he predicted that China would eventually turn to private enterprise.

A lot of people thought Mr. Cheung was too upbeat about China’s future. In fact, Mr. Cheung, during his expatriate period, had always shown great interest in his motherland, gathering information about the mainland from his friends and relatives living in Hong Kong and on the mainland. In 1982, he returned to Hong Kong from the US and took a job at the University of Hong Kong’s School of Economics and Finance. In this way he was able to observe the changes taking place on the mainland at a much closer distance. From then on Mr. Cheung, working as a columnist, used his academic expertise to analyze the practical matters around him, especially every step of China’s reform scheme. His articles provided a window to Chinese learners and scholars and informed them of not only about specific economic instances, but also imparted colorful trivia from the world of the academic community.

As China furthers its opening up and reform scheme, Mr. Cheung has also gotten more opportunities to deepen his observations and studies. For him, China is the most dynamic economic lab in the world.

Now China has entered the 30th year of economic reform; the country is evolving along the lines that Mr. Cheung predicted. People will remember his accurate predictions in tandem with China’s economic reform history.

(Source: Xinmin Weekly, translated by Pang Li for China.org.cn, November 10, 2008)