Does the Chinese economy still have advantages?
- By Zhu Tian
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E-mail China.org.cn, October 8, 2015
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Tipping the balance [By Jiao Haiyang/China.org.cn] |
China's growth rate has been dropping, retreating to 7 percent in Q2 this year from the highest point of 14 percent in 2007. Although such a decline may be normal and even periodical, it inevitably provokes worries about the long-term growth prospects of the country, and where advantages might lie for China's future growth.
To answer this question, one has to understand China's "development miracle" - an average 10 percent growth rate during the 30 years prior to the latest global financial crisis.
Many people have attributed this to strong central government proactive intervention in the market economy. In fact, many countries have implemented such practices after World War II, but few managed to retain high-speed growth except those in East Asia. Compared with other developing economies, this region did not really have any special advantages in terms of political institution and policy. Japan, the Four Asian Tigers - Hong Kong, Singapore, South Korea, and Taiwan - and the Chinese mainland all prospered while they adopted different political or economic institutions.
It is well known that Asian people have a tradition of frugality and pay attention to education and study. Perhaps it is also a reason that East Asian countries and regions could outpace other developing countries in accumulating material wealth and human resources while learning from the more developed Western countries.
It was 19th Century German sociologist and political economist Max Weber who first stressed the role of cultural values, such as diligence and frugality, in facilitating economic development.
The connection between Confucian culture and economic takeoff was also proposed by other sociologists and cultural scholars alike, although economists, out of their professional habit, were reluctant to admit culture could play a key role in economic growth.
Given that the Chinese culture is so good for growth, then why did China's economic takeoff only occur in the past 30 years?
No matter how good a culture is, it can only be a facilitating factor and is incapable of functioning without matching institutions or State policies. China's reform and opening-up launched in 1979 was vital to China's rise. However, other developing countries implementing similar reforms failed to achieve similar results.
In fact, most developing countries carried out privatization and marketization since the 1980s, but this did not lead either Latin American countries or African ones to generate rapid growth.
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