China’s liberalization and structural reform drives growth • Hacker News Board

Re: China’s liberalization and structural reform drives growth

#11

Post by lkrubner » Thu, Aug 08, 2019, 2:37 AM UTC

lkrubner wrote: post #7

WoodenChair wrote: post #6

Earlier quoted context omitted.

> 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…

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…

Why is this comment (above) getting down voted? This is a factually true comment.

Re: China’s liberalization and structural reform drives growth

#12

Post by WoodenChair » Thu, Aug 08, 2019, 2:39 AM UTC

lkrubner wrote: post #7

WoodenChair wrote: post #6

Earlier quoted context omitted.

> 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…

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…

> 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%.

I'm afraid the data doesn't back you up at all. The Chinese cultural revolution is considered the years 1966-1976. Here is the data for those years in real per capita GDP growth[0]:

7.7, -8.1, -6.6, 13.7, 16.1, 4.2, 1.3, 5.4, 0.2, 6.8, -3.1

Average: 3.4%

Here are the numbers for the 1980s (1980-1990):

6.5, 3.8, 7.4, 9.2, 13.7, 11.9, 7.3, 9.9, 9.4, 2.6, 2.4

Average: 7.6%

7.6% is more than double 3.4%. So, as you can see, all of your assertions are wrong.

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

Re: China’s liberalization and structural reform drives growth

#13

Post by taneq » Thu, Aug 08, 2019, 2:42 AM UTC

roenxi wrote: post #10

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 econo…

> 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).

Re: China’s liberalization and structural reform drives growth

#14

Post by mastazi » Thu, Aug 08, 2019, 2:42 AM UTC

roenxi wrote: post #10

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 econo…

> 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.

Re: China’s liberalization and structural reform drives growth

#15

Post by justicezyx » Thu, Aug 08, 2019, 2:46 AM UTC

Merrill wrote: post #2

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 th…

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

Re: China’s liberalization and structural reform drives growth

#16

Post by qd6pwu4 » Thu, Aug 08, 2019, 2:52 AM UTC

roenxi wrote: post #10

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 econo…

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.

Re: China’s liberalization and structural reform drives growth

#17

Post by roenxi » Thu, Aug 08, 2019, 2:53 AM UTC

mastazi wrote: post #14

roenxi wrote: post #10

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 econo…

> 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…

> 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...

Re: China’s liberalization and structural reform drives growth

#18

Post by kerng » Thu, Aug 08, 2019, 2:53 AM UTC

roenxi wrote: post #10

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 econo…

> 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.

Re: China’s liberalization and structural reform drives growth

#19

Post by ztratar » Thu, Aug 08, 2019, 2:58 AM UTC

"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.

Re: China’s liberalization and structural reform drives growth

#20

Post by lkrubner » Thu, Aug 08, 2019, 2:59 AM UTC

WoodenChair wrote: post #12

lkrubner wrote: post #7

Earlier quoted context omitted.

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…

> 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%. I'm afraid the data doesn't back you up at all. The Chinese cultural revolution is considered the years 1966-1976. Here is the data for those years in real per capita GDP growth[0]: 7.7, -8.1, -6.6, 13.7, 16.1, 4.2, 1.3, 5.4, 0…

The Wikipedia article that you link to says it includes PPP estimates and also says this:

“The GDP also has been converted to U.S. dollar-based data by utilizing the moving average exchange rate.”

I disregard PPP estimates since so many subjective and cultural decisions have to go into PPP calculations, and during a civil war there is a wide space for the PPP decisions to include the political factors that we should ignore when discussing the real economy. Likewise, why would it be valid to convert to USA currency? Why not measure year to year growth directly, from the perspective of China? The variations in the currency exchange would again introduce those political factors that a person would want to ignore if they were curious about the real strength of the Chinese economy.

Back when I studied Chinese history it was well known that the Chinese economy had done well during the Cultural Revolution. Now that reality is being re-written to fit a political narrative that simply asserts that the economy did not do well during the Cultural Revolution.