Demystifying the Chinese EconomyChina was the largest and one of most advanced economies in the world before the eighteenth century, yet declined precipitately thereafter and degenerated into one of the world's poorest economies by the late nineteenth century. Despite generations' efforts for national rejuvenation, China did not reverse its fate until it introduced market-oriented reforms in 1979. Since then it has been the most dynamic economy in the world and is likely to regain its position as the world's largest economy before 2030. Based on economic analysis and personal reflection on policy debates, Justin Yifu Lin provides insightful answers to why China was so advanced in premodern times, what caused it to become so poor for almost two centuries, how it grew into a market economy, where its potential is for continuing dynamic growth and what further reforms are needed to complete the transition to a well-functioning, advanced market economy. |
Contents
ONE Opportunities and challenges in Chinas economic development | 1 |
TWO Why the Scientific and Industrial Revolutions bypassed China | 22 |
THREE The great humiliation and the Socialist Revolution | 55 |
FOUR The comparative advantagedefying catchingup strategy and the traditional economic system ... | 74 |
FIVE Enterprise viability and factor endowments | 104 |
SIX The comparative advantagefollowing development strategy | 124 |
SEVEN Rural reform and the three rural issues | 152 |
EIGHT Urban reform and the remaining issues | 173 |
NINE Reforming the stateowned enterprises | 191 |
TEN The financial reforms | 207 |
ELEVEN Deflationary expansion and building a new socialist countryside | 222 |
TWELVE Improving the market system and promoting fairness and efficiency for harmonious development ... | 246 |
THIRTEEN Reflections on neoclassical theories | 264 |
APPENDIX Global imbalances reserve currency and global economic governance | 287 |
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Common terms and phrases
Bureau of Statistics CAF strategy capita income capital accumulation capital-intensive century China Chinese cities companies comparative advantage competitive market consumption cost deflation demand developing countries Development Strategy distortions distribution East Asian economies economic development economic growth economists economy’s efficiency Europe exports factor endowment structure farmers financial system four Asian Tigers grain higher household responsibility system hypothesis improved incentives increase Industrial Revolution infrastructure inputs institutions interest rate investment isocost Japan Justin labor labor-intensive loans major market economy ment Ming Dynasty National Bureau output Peking University People’s percent planned economy policy burden prioritizing heavy industries problems profit protection and subsidies reform and opening renminbi rent-seeking result rural areas sectors shock therapy small and medium SMEs social socialist countryside SOEs Statistics of China stock market surplus technological innovation theory Three Rural Issues tion trade transition United upgrading urban viability workers World Bank