Showing posts with label economic development. Show all posts
Showing posts with label economic development. Show all posts

China's Economic Transformation Review

China's Economic Transformation
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China's Economic Transformation ReviewThis book provides a good deal of moderately valuable information about the Chinese economy. It also has large sections of what seem like pieces of an ordinary introductory econ textbook, which will be tedious to anyone who has taken an econ course without being terribly valuable to those who haven't. The book appears fairly thorough and objective, but not very imaginative or insightful.
One point he makes that I found worth remembering is to point out the similarities between Chinese state ownership of enterprises with U.S. University ownership of companies created to commercialize their research. In both cases the owning institution has a mission very different from commerce, but often allows the enterprise to function as a business. Alas, he doesn't explore the incentive structures that make this often work in China but create monopoly-style inefficiencies when most other governments own businesses.China's Economic Transformation Overview

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Selling China: Foreign Direct Investment During the Reform Era (Cambridge Modern China Series) Review

Selling China: Foreign Direct Investment During the Reform Era (Cambridge Modern China Series)
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Selling China: Foreign Direct Investment During the Reform Era (Cambridge Modern China Series) ReviewI find Prof Huang's "Selling China" much more than just an academic achievement which it is -- with its disciplined arguments supported by a wealth of well-researched facts.
After 18 years of working on the Greater China scene -- most of it foreign investment related, for me, the greatest value of the book is its main theme -- that the large inflow of FDI over the years reflects weaknesses rather than strengths of the Chinese system. It is not just another point of view in the already overcrowded gallery of China commentary. For me, the well-argued and well-researched "unconventional" view answers some of the key China investment related questions at a very practical level, and should have important implications for government policy making and corporate decision making alike.Selling China: Foreign Direct Investment During the Reform Era (Cambridge Modern China Series) Overview

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Capitalism Without Democracy: The Private Sector in Contemporary China Review

Capitalism Without Democracy: The Private Sector in Contemporary China
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Capitalism Without Democracy: The Private Sector in Contemporary China ReviewThe book refutes the prevailing modernization theory that capitalism can lead to democracy. Findings from the study of private entrepreneurs in different regions in China supports Professor Tsai's proposition that the relationship between economic liberalism and political freedom is not definitely correlated.
Putting it in a nutshell, this book has contributed to three major findings in the study of political economy in China. First, economic liberalization in China since 1976 has not resulted in the emergence of democratic regime or the decline of the authoritarian state. According to Professor Tsai, private entrepreneurs in China are not nuts about democracy and researchers cannot view private entrepreneurs as a homogeneous class because of their diverse identities, interests, and values in politics. Second, widespread apathy amongst private entrepreneurs in China towards democracy does not mean that they have an acquiescent nature. They tend to adopt different coping strategies rather than instigate virulent opposition against the regime or demand regime transition when various formal institutions constrain their business activities. The so-called "coping strategies" result in a variety of "adaptive informal institutions" being established in different economic regions in China. Based on hundreds of in-depth interviews and nationwide survey of private entrepreneurs, Professor Tsai divides them into five key types; namely Wenzhou model, Sunan model, Zhujiang model, state-dominated model, and Limited development model. For instance, private entrepreneurs in Wenzhou engaged in a variety of innovative financing practices to set up and expand their businesses which were outside of the state banking system. Private entrepreneurs in Guangdong province sought to establish fake foreign enterprises in order to enjoy policy advantages including tax breaks and preferential access to land. Third, the near ubiquity of adaptive informal institutions becomes an endogenous force that has prompted the government to generate institutional change without regime change. However, such institutional change to react to the existence of adaptive informal institutions cannot be likely to become sources of democratization. Professor Tsai maintains that private entrepreneurs in China show no intention of agitating for democracy but capitalism can exist without democracy, provided that the Chinese government can attend to adaptive informal institutions that complement endogenous institutional change.
This book is highly recommended to readers who are interested in political economy and the development of private enterprises in China.
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Paths to Development in Asia: South Korea, Vietnam, China, and Indonesia Review

Paths to Development in Asia: South Korea, Vietnam, China, and Indonesia
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Paths to Development in Asia: South Korea, Vietnam, China, and Indonesia ReviewWhy have some states been more successful at facilitating rapid economic growth than others? "Paths to Development in Asia" compares the experiences of Korea, Indonesia, China, and Vietnam to help provide answers. Many had thought that the end of the Soviet Union meant that the states' role would now be greatly limited. Instead, it turned out that in developing Asian nations, controlled mobilization and suppression of the populace had a positive effect on state cohesion and subsequent economic development, while mass incorporation (democracy) and laissez-faire policies did not. Vu also points out that the 'big-bang' mode has been the prevalent mechanism of state formation in recent years - a mode that facilitates wholesale change.

Vu's examination begins with South Korea. Vu contends that several elements helped create a foundation of strong societal cohesion in Korea prior to its economic rise. One of the first was that both prior to and after the Korean War, the populations of both South and North Korea tended to sort themselves out - supporters of Kim Il Sung went north, while those favoring Rhee stayed or went South. Syngman Rhee, South Korea's first leader after the end of WWII, had initiated land reform in that nation over the 1949-54 period. Peasants were required to pay landlords in installments for land received, a requirement that the Korean Communist Party opposed. In return, Rhee violently suppressed that opposition group, and others. Prior to Rhee, the Japanese had built a cadre of efficient officials and a large police force to replace the corrupt, inefficient monarchy that had existed. The Japanese had also aligned themselves with wealthy Korean entrepreneurs using subsidies, loans, contracts, and strict controls over workers - providing a history of stable industry and work relations. Rhee's government had also used propaganda and coercion to eg. get peasants to replace thatched roofs with composition or tile (eliminate a major fire hazard) - laggards had their roofs torn off by local officials. Rhee's resignation, however, was forced by student protests over 1960 election violence, fueled by the preceding rapid expansion of its education system, and a declining economy. General Park then seized power, declared martial law, and dissolved the National Assembly - leaving himself solely in charge with little/no viable opposition force.

Rhee had contributed decisively to building a unified development structure, but failed to use it to pursue development. The country was in economic decline - lagging even North Korea. General Park seized power after Rhee's abdication, declared martial law, and dissolved the National Assembly - leaving himself solely in charge with little/no opposition force. However, Park was still facing that same spectre of economic decline, as well as potential rivals in the military. Thus, he quickly proceeded to use the nation's cohesion to focus on building South Korea's economy.

Switching to China, Vu observes that when Mao declared the formation of the People's Republic of China in 1949, he had a cohesive core of Chinese Communist Party (CCP) leaders already well imbued with the 'correct line,' plus a loyal four million-man military. CCP administrative power extended down to the village level, and its strength so impressed Stalin that he provided Soviet aid (men, materials, money). Campaigns against 'anti-revolutionaries' and former loyalist followers of Chiang Kai Shek further unified the society. Then came land-reform cooperatives (resisted at first) which eventually seemed to further unify the peasants and destroy opposing elites, but left smoldering resentment.

Mao then made three more successive major errors that undermined cohesion. First came the 1957 campaign ('Let 1,000 flowers bloom') that was supposed to allow mild criticisms of government leaders; when the criticisms turned into an unexpected torrent, Mao's 'Anti-Rightist' campaign followed - again aimed at solidifying support. Mao's 'Great Leap Forward' followed in 1958, and was his next major mistake, directly responsible for an estimated 20 million deaths due to starvation and the loss of Soviet support (they thought he was 'crazy'). Mao's fourth major error was launching the Cultural Revolution' (1965-68) to stomp out thinking resentful of CCP leadership up to that point. Mao's death in 1976 left a populace highly resentful of CCP leadership to-date; that leadership, in turn, realized that it needed to quickly implement economic improvement to stay in power. Their first act was to free the peasants from major government dictates (what to grow, etc.), as well as the requirements and limitations of communal living and farming. These steps quickly eliminated a major source of peasant discontent and boosted food supplies (a major concern for the entire nation). Soon after came the leaders' decision to continue linking CCP officials' career paths to performance - only now it would be that of their area's economic progress. China had again become unified, cohesive, and ready for major change.

Similarly, with other Asian nations, per Vu's accounting. He also points out instances when Asian nations' ability to grow was limited by lack of unity - India (a number of castes, multiple political parties) offers a prime example.

Summarizing, Vu concludes that "all states are not born equally - some are better endowed with cohesive structures" than others. However, he also quotes Chalmers Johnson's observation that though authoritarianism is the most common regime type, it rarely is accompanied by high-speed, equitable economic growth. Apparently, cohesion is a necessary but not sufficient requirement.Paths to Development in Asia: South Korea, Vietnam, China, and Indonesia Overview

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China in the 21st Century: What Everyone Needs to Know Review

China in the 21st Century: What Everyone Needs to Know
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China in the 21st Century: What Everyone Needs to Know ReviewBeing surprised is something I expect from a good work of fiction, but not necessarily from nonfiction, especially when I am familiar with the subject - or so I thought. Thus it was a treat when I found plenty of surprises in this book, such as the following passage from the section titled "What is the alternative to viewing Mao as a monster?":
"There are many alternatives to thinking of Mao as a fiend who was China's Hitler. One useful one is to see Mao's place in China today as comparable to that of Andrew Jackson's in the United States. Though admittedly far from perfect, the comparison is based on the fact that Jackson is remembered both as someone who played a significant role in the development of a political organization (the Democratic Party) that still has many partisans, and as someone responsible for brutal policies toward Native Americans that are now often referred to as genocidal.
"Both men are thought of as having done terrible things, yet this does not necessarily prevent them from being used as positive symbols. And Jackson still appears on $20 bills, even though Americans tend now to view as heinous the institution of slavery (of which he was a passionate defender) and the early 19th-century military campaigns against Native Americans (in which he took part)."This comparison is refreshing, and it could only come from someone who knows both American and Chinese history intimately. Admittedly, I have limited knowledge about President Andrew Jackson. On the Chinese internet today, when searching for "President Jackson," glorious descriptions fill my eyes: "people's friend," "the bank killer," a war hero who defeated the British army, a wise politician who prevented the US from splitting apart. No mention of his not-so-glorious role in killing Native Americans. You wonder how an average internet surfer in mainland China can get a complete picture of this controversial American president.
But, before you feel fortunate to have the benefit of a free press and internet in the US, hold on a second. Can the average American reader get the whole picture of Mao? This really depends on what you happen to read or hear. If you have only read Jung Chang and Jon Halliday's best-selling biography, Mao: The Unknown Story (2005), for example, then Mao was born a monster. If you have only read Edgar Snow's Red Star Over China (1937), on the other hand, then Mao was a legendary hero of the Chinese peasants. The actual Mao, of course, was a more complex historical figure than either of those works portray.
Chinese in the Tang Dynasty already understood "Listen to both sides and you will be enlightened; heed only one side and you will be benighted", but it is never easy to consistently follow this practice. The few American writers I know of who write about China with this maxim in mind include James Fallows, Peter Hessler, and Jeffrey Wasserstrom. If you are interested in China and don't want to be benighted or brainwashed, read books with different views before forming your opinion. Or, as a short cut, start with a book like China in the 21st Century: What Everyone Needs to Know. The parallel between Mao and Andrew Jackson might be imperfect, as Wasserstrom has noted, but it is a big step up from good-evil dichotomy that seems so pervasive.
In fact, one of the most appealing characteristics of Wasserstrom's new book is that it does not sidestep controversial issues and opinions. On the contrary, it deliberately provides the reader with views from opposite sides, in a rather straightforward and balanced manner. In recognizing differences between Western and Chinese views, Wasserstrom helps break stereotypical perceptions and opens the reader's inquiring minds. He does so throughout the book.
The breadth of this relatively short, 150-page book is amazing. Starting with "Who was Confucius," it continues without pause to "What was the Dynastic Cycle," "What was the Opium War," "Why did the Qing Dynasty Fail," and much more. Given the brevity and the format, there is a necessary lack of nuance, but there is a great overview of the backbone of Chinese history presented in the blink of an eye.
Building off of the past, the book devotes a chapter to the post-Mao development of China into the modern state it now is. Then it outlines "U.S. -China Misunderstandings," and finally presents a chapter on what the future holds, providing useful insights into the different ways that Americans and Chinese view one another and how differently they interpret the same events.
Understanding what is happening in China, or America, is difficult for even the best informed people on both sides of the globe. If you are trying to get real insight into the Boxer Rebellion, Mao Zedong, Tibet or a host of other issues relating to China, one short book is surely not enough. But whether you are new to things Chinese or are an old China-hand, something said in China in the 21st Century: What Everyone Needs to Know will make you think twice, and the references included should carry you quite a way. If you feel a bit lost for not getting a definitive answer to some questions, then you might be one step closer to learning the truth.
(A more complete review can be found on my website [...])China in the 21st Century: What Everyone Needs to Know Overview

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Run of the Red Queen: Government, Innovation, Globalization, and Economic Growth in China Review

Run of the Red Queen: Government, Innovation, Globalization, and Economic Growth in China
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Run of the Red Queen: Government, Innovation, Globalization, and Economic Growth in China ReviewThis book by Breznitz and Murphee is excellent. With rigorous analysis, the authors arrive at important conclusions, including these three: (1) Global production can obscure which stage or stages of innovation generate optimal growth benefits. This has significant implications for business strategy and public policy. (2) Global production often involves disparate stages, and different innovation capabilities become necessary in the same industry. This leads to divergent and sustainable models of innovation that look nothing like Silicon Valley models. (3) China's innovation model, which has been immensely beneficial to China and is sustainable for at least the next five years, is the opposite of what the central government in Beijing had intended, and central government policies are the main threat to continuation of China's economic success. Brexnitz and Murphee are thorough and thoughtful in their explanations, and Run of the Red Queen is a requisite read.Run of the Red Queen: Government, Innovation, Globalization, and Economic Growth in China Overview

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