[photopress:Bohai_zone.jpg,full,alignright]Anton Smitsendonk has written a Jamestown China Brief, ‘Guarded Walls within the Chinese Stock Market’ so he is not inexperienced. The author is National Co-ordinator for the UK-China Sustainable Development Dialogue. In his personal capacity he has written a review of China so his views do not necessarily reflect those of the UK government.
Briefly he says that three decades ago China was isolated and struggling, with poverty rates on a par with Malawi.
Today, China has joined the premier league: China’s economy has grown nine-fold to become the fourth largest economy in the world (a reasonable appreciation of the yuan would propel China in to second place, ahead of Japan).
A staggering 300 million people have been lifted out of poverty in this time. China now holds $1.75 trillion in its coffers, and has become the number-one trading nation and destination of foreign direct investment.
This is sometimes known as the ‘China Development Model’ and it is the subject of intense scrutiny and, sometimes, intense envy.
There is little doubt hat the focus on export-oriented growth and gradual liberalization of prices, combined with an outward-looking foreign investment regime were instrumental to high and sustained economic growth.
A high savings rate, upfront investments in large-scale infrastructure development, rapid urbanisation and a good investment climate were also undoubtedly key elements of economic success.
That is the good news. Now the criticisms which are mild.
The suggestion is that the term “China model” implies at least three things: success, replicability and deliberate design. On all three counts there is, perhaps, room still for healthy debate.
[photopress:zone2.jpg,full,alignleft]First the idea is presented that as an economic miracle it was not that great although it is difficult to think of a major country that did such an economic turnaround in such a short space of time. Then there are ecological problems. Finally, the ‘China model’ has still left some people, some areas, poor.
The suggestion is made, almost certainly correctly, that it faces formidable challenges going forward: how it addresses these will be the real test of its success.
Source: Bangkok Post