China’s liberalization and structural reform drives growth

> 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).

> 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.

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.

> 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.

> The only question is how they managed to fall so low that they weren't a competitive superpower.

Well, first of all, they had two thousand years autocratic Imperial rule. This was overthrown in 1912, but then came the Japanese invasion, then WW2, then a civil war.

The civil war ended up being won by a somewhat anti-intellectual group of people (the Communists) who had all sort of economic backwards programs (not to mention social upheaval by sending intellectuals to "re-education" camps).

As for the reason why things remained static during the Imperial rule: this was actually the norm for most civilizations. If you look the world in 1600, just before the invention of the telescope, Western Europe, the Ottoman's, the Mughals ruling in India, and Imperial China, weren't too different. The non-Europeans were actually ahead of the Europeans by some metrics.

Once the Scientific Revolution was embraced by the Europeans, and generally rejected by everyone else, the Euros left everyone else in the dust. The real question is: why were the Europeans the only ones to embrace it.

The book Intellectual Curiosity and the Scientific Revolution by Toby Huff explores this question. Highly recommended.

> The only question is how they managed to fall so low that they weren't a competitive superpower.

Because for pretty much their entire history, anytime they tried to achieve anything, they were either conquered by an aggressive imperial power, stuck with a terrible repressive government, or both in rapid succession.

“I wouldn’t trust any article written in English...”

What if the article was written by someone from China?

“Zhang Jun is Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai-based think-tank.”

Communism.

Any society with majority chinese population (singapore, taiwan, hong kong) that has a free market is a modern developed country. China stuck behind for 50 years, and is now catching up.

> how they managed to fall so low

I'm amazed that in so many English discussions about China's fall since the 17th century, there are absolutely zero mentions of the Manchus. On the other hand, read any Chinese discussion on it and you'll always see the Manchu domination popping up as a reason if not one of the main causes.

The Manchus took advantage of internal strife within the Ming dynasty during the 17th century and conquered China after the last Ming emperor killed himself when rebels surrounded the palace and a Ming general let them through the Great Wall.

The problem with the Manchus is that they were semi agrarian/semi nomadic and had very little desire for technological progress. Unlike the Han Chinese who always had to frequently rely on technology to overcome the nomads on horseback from the North, the Manchus only believed in horseback and arrows. In fact the late Ming had more natively produced cannons than the Qing dynasty had during the opium wars hundreds years after. Even the western expansion wars conducted by the Qing dynasty early on had gunpowder teams that were only staffed by the Han Chinese because the Manchus initially looked down on guns and cannons.

Lastly the administration was sclerotic because a minority group of 1% was supreme over the other 99%. The Manchus/Mongols/Tibetans owned most of the land in China during the Qing dynasty even though they were a tiny minority. The Manchu/Mongol/Tibetan officials were also of higher status than the Han Chinese. During imperial court, the Qing dynasty had two sessions. After the first one, the Han Chinese had to leave because they were not trusted. In fact up until the late Qing dynasty when the Qing dynasty was ravaged by foreign powers, senior court officials even mentioned to give China to its friends (Europeans/Japanese) rather than give it back to their slaves (the Han Chinese).

This is not to say the Manchus were the only reason for China's downfall (in fact the Ming had started to stagnate a little), but they were absolutely a very large part of it. What many non-Chinese think about Chinese today are actually from the Manchus. The Qipao, the pigtail (Manchu Queue), etc.

The article mentions, China for the first part of 20th century, and before 1980s, isn't a stable country.

Qing government is overthrown at 1911, which follows by a loose governance of various warlords, and KMT merely reins the power to control them. Before stuff can get better, the Japanese invasion happens, drags China into even bigger misery well into 40s. Tens of millions people died in WWII. After WWII, the Chinese Civil War happens immediately between KMT and CCP, with CCP ascending to power after 4 years.

At this stage, China finally regains a strong central government as it usually does in its history. Unfortunately, Mao is an ideology fueled dictator, who knows nothing about economy development. So China missed the golden age of economy and technology development worldwide before 80s. When its leader finally comes to sense, the world is a far different place than they would want to admit, and China is way behind already and have so much to catch up.

After which, it does something right about itself. Cheap affordable, mass education offered to its populace. Student loan was unheard of in China (not sure it is still case nowadays). And freedom to do business is offered to its citizens, and they are encouraged to get rich by the party. CCP would like to claim all the credits, but in reality it is mix of everything, it does something right, but more like catalyst that starts something even beyond its own imagination, driven by the desire of one billion people to seek a more abundant life.

Yes, I think what really happens in China today is that it finally comes back at the world stage, not as a catch-up, but as a player, with its own pros and cons.

Such coming back should be regarded as the normal of the world order, but I guess it will have to earn the status before the rejection from the post cold war, western liberal order is significantly weakened or defeated.

Yes, but that IP theft is more often done by local entrepreneurs (moving the factory out from under a foreign company) as it is the state.

Regarding Chinese economic liberalization, it's mostly happening in the country and villages.

I would recommend you to read Steven Cheung. https://en.wikipedia.org/wiki/Steven_N._S._Cheung#Selected_b...

The article does not do a really good job at explaining what the government it doing but basically it is:

1. Creating competition between states/cities (Beijing vs Shanghai) which has similar advantages to the free market EVEN if both groups are part of the government. This tries to reduce waste and puts natural pressure on companies (including ones that are state owned).

2. Encouraging close proximity (like silicon valley) by using grants, lower taxes, etc. This encourages lots of companies in the same industry to be close together and often in the same building. This encourages transfer of ideas and staff between companies. (economic development zones)

3. Limiting the number of economic development zones so that they are not all over the place.

To just ignore anything that Chinese companies have done and say it is all stolen or copied is rather biased.

Alipay and WeChat are probably the easiest example to look at. They both started very different (WeChat was just a copy of What's App, which is a copy of MSN messenger, which is a copy of AOL messengers, which is a copy of IRC which is a copy of netsend, which is a copy of telegrams, which is a copy of smake signals, etc... - everything is based on what came before it)

Slowly based on competition with each other they have stolen each other features and now do basically the same things. Forget about America (Facebook keeps copying features from WeChat).

Hope this helps to explain what the article does not explain.

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

Compare the crude birth rate since 1920 for Thailand and China on this Gapminder chart [1]. You'll see that Thailand started with a birth rate higher than China's. In 1967 they were at around the same level at which point they both simultaneously started trending down. Thailand maintained a smooth curve down to its present level which is lower than China's. China's downward curve was interrupted in 1979 (introduction of the One Child Policy) when it curved upward for a bit.

So, despite all the myth-making, China's One Child Policy was an authoritarian disaster that did not reduce births beyond their already downward trend. In fact, it disrupted the already established trend.

[1] https://www.gapminder.org/tools/?from=world#$state$time$star...

Western societies rise to prominence is due to acceptance of scientific temperament with a balanced moral view looking beyond religion and tribal mentality. They challenged the established religious groups and tribal rules. Traveled across oceans and built global trade. Property rights and all you described are just means which are just subservient not the main reason.

China is moving forward due to the same scientific temperament, may be need to supplement more moral education to build a balance. But that's a normal process given it took out 1.4 billion people out of poverty and making them one of the largest middle income economy and slowly moving towards developed.

You can see an example in India where all values you described are part of its constitution (probably the only nation where there is a chapter on human rights in its Constitution) and government proclaim to protect it. Still has one of the highest poverty levels in the world. India needs more scientific temperament to come out of its religious tribal mentality and need more science education.

The problem you described of Hong Kong is its own making where people accepted living in prison cell size house and rely on get rich quick scheme when China was closed which doesn't work anymore. So it's just paying the price of its own choice.

It's actually a lot simpler, stealing gold works.

It's old fashioned but they extracted $45 trillion from India alone, think about how much was taken from Africa and China....also at it's peak opium deals in China accounted for 35% of the UK's GDP (expect similar numbers in the US)...

Explanations of western growth that exclude economic history seem suspicious to me, a lot of the true story & criminality is hidden in the numbers.

Of the few ways to avoid the Malthusian trap, the West did it by robbing people at gun point.

> "On a journey of a hundred miles, 90 is but halfway"

The closest I could find (via googling) is this saying - "Walking 100 Miles: Stopping at 90 miles, is the same as stopping half-way" which means being 90% done with something is the same as being 50% done - you're not done!

https://www.orientaloutpost.com/shufa.php?q=walking+100+mile....

Its basically an akward (in english) rephrasing of the common "the last 10% is the hardest" concept. Also with the implied value proposition that a job 90% done is at best worth 50% of a finished one.

My experience with China is that certain parts are 100% first world, but other parts are 100% 3rd world, with many places inbetween.

Whereas the difference between the poorest & richest Brit while significant is nothing compared to the difference between the poorest & richest Chinese.

Maybe you meant millions instead of billions?

The way you framed it is a bit disingenuous. The reasoning behind the policy is that the government recognizes that China back then severely lacked any modern industrious knowledge. In order to quickly catch up, China decided to pour all its resources into a couple provinces that either had existing industrious base left over from foreign occupation or had strategic locations. As well as sending the best people over seas hoping to gain whatever knowledge necessary to kick start the economy. And it's not like the government simply forgot about the billions of farmers, one of the top priority for officials are poverty alleviation. It's a key kpi for any promotion within the government.

Now you could argue the implementation is not perfect, but given the situation back then I agree with this policy, and I'd be interested to hear how you would approach this differently.

So are you challenging trickle down economics? That's debatable.

I believe at least at the early stage capitalism trickle down economics works. However, without proper checks and balance system, corruption brought by power and wealth does stop the trickle down effect.

Therefore in China where corruption is an accepted norm, it's doomed to fail. That was not originally planned though.

Maybe that's also why recently the CCP has been trying so hard to abolish religions, to keep the people's moral standard low.

China has achieved poverty reduction unparalleled in human history. In 1981 around 88% of the Chinese population lived in extreme poverty. It has now declined into 2%. This happened parallel to the extreme increase of inequality. China has experienced a modest decline in inequality since 2008 as the economic growth has hit into trouble. 2/3 of the world poverty reduction between 1990 and 2005 was because of China.

Increase of inequality can't have increased poverty, but maybe you argue that it could have been reduced even faster and China didn't break records fast enough.

And he wasn’t just scamming?

> 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. In the 1980s China began economic liberalization under Deng Xiaoping and that was when its economy began growing tremendously. So, there is a direct connection between liberalization and growth. Of course no growth of 8-10% is sustainable over many decades, and it's likely they are simply reaching a new equilibrium.

That's an interesting perspective considering the US Economy hasn't broken 3% GDP growth per year since 2005.