Chinese economic boom: What rendered it possible?

VHS

Ad Honorem
Dec 2015
4,491
Florania
#1
Let's use the nominal GDP per capital just for convenience:
GDP per capital of the PRC in 1990 was $370
GDP per capital of the PRC in 2016 is about $8000+

Some may talk about Deng Xiaoping, but much of the tremendous growth happened from 1997 to now.
During 1997, Hong Kong's economy was about 18% of the PRC economy.
Even in 2014, the share of Hong Kong dropped to 3%.
http://www.vox.com/2014/9/28/6857567/hong-kong-used-to-be-18-percent-of-chinas-gdp-now-its-3-percent

Interestingly, the GDP per capital of many African countries during the same period stagnate.
What rendered such development possible?
I remembered a post that states Thailand stagnated because its industrial area is limited to Bangkok and the surrounding area.
 
Oct 2015
1,120
California
#2
Let's use the nominal GDP per capital just for convenience:
GDP per capital of the PRC in 1990 was $370
GDP per capital of the PRC in 2016 is about $8000+

Some may talk about Deng Xiaoping, but much of the tremendous growth happened from 1997 to now.
During 1997, Hong Kong's economy was about 18% of the PRC economy.
Even in 2014, the share of Hong Kong dropped to 3%.
http://www.vox.com/2014/9/28/6857567/hong-kong-used-to-be-18-percent-of-chinas-gdp-now-its-3-percent

Interestingly, the GDP per capital of many African countries during the same period stagnate.
What rendered such development possible?
I remembered a post that states Thailand stagnated because its industrial area is limited to Bangkok and the surrounding area.
Simple answer, outsourcing of manufacturing jobs from the west.
 

tomar

Ad Honoris
Jan 2011
13,509
#4
Before China, Japan, the South Korea, Taiwan and Singapore had a boom (these are more relevant than a comparison with african countries that make no sense at all).... China was a major economic player for centuries, it was just a matter of time for it to regain its righful place.. Note that even at $8 000 per capita it is still seriously behind its neighbors (Taiwan $22 000 Korea $25 000)

China had law and order, a centralized bureaucracy, long term planss (in fact very long term when one compares to western countries) an educated population, a large domestic market and a history of innovation to support its growth
 
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VHS

Ad Honorem
Dec 2015
4,491
Florania
#5
Before China, Japan, the South Korea, Taiwan and Singapore had a boom (these are more relevant than a comparison with african countries that make no sense at all).... China was a major economic player for centuries, it was just a matter of time for it to regain its righful place.. Note that even at $8 000 per capita it is still seriously behind its neighbors (Taiwan $22 000 Korea $25 000)

China had law and order, a centralized bureaucracy, long term planss (in fact very long term when one compares to western countries) an educated population, a large domestic market and a history of innovation to support its growth
Still, this is quite impressive to turn from an impoverished, overpopulated country to one of the world's economic powerhouse.
The time period is 1990-present.
May China break the middle income trap? It is still too early to say, but it still has fairly substantial poverty!
 
Oct 2016
1,107
Merryland
#6
capitalism.

after years of stagnation, and seeing Hong Kong and Viet Nam do so well, Beijing released state control and allowed private capital to be used to start a for-profit industrial base.
said investors utilized China's best resource, cheap labor, and off they went.

they might also have been inspired by the fall of the USSR / Berlin Wall. the people wanted more stuff and less doctrine.
pragmatism triumphed over ideology (Marxism).
 

VHS

Ad Honorem
Dec 2015
4,491
Florania
#7
capitalism.

after years of stagnation, and seeing Hong Kong and Viet Nam do so well, Beijing released state control and allowed private capital to be used to start a for-profit industrial base.
said investors utilized China's best resource, cheap labor, and off they went.

they might also have been inspired by the fall of the USSR / Berlin Wall. the people wanted more stuff and less doctrine.
pragmatism triumphed over ideology (Marxism).
Wait! Vietnam is quite a bit behind China as far as GDP per capital goes.
Cambodia is picking up quite rapidly as well.
Thailand and Malaysia are stagnating.
 
Dec 2011
1,304
#9
Is there a chicken and egg situation? The jobs couldn't have been outsourced until China had taken the decision to and then built up its industrial structure.
No, there isn't, because it wasn't really the West that invested most in China, but other Asian countries. The major contributors to China's FDI and technology inflows are Hongkong, Japan and Taiwan. Overall, Japan and the Asian Tigers had been the most significant source of both FDI and technology, and thus have had the greatest impact on industrial development. The West only started making larger investment in the wake of the Asian financial crisis. Again, we have the problem of origin and sustaining of industrialization as in the threads on England's industrial revolution. We might argue, convincingly, that FDI and technology inflows to China after 2000, originating in the West, were instrumental in sustaining the China's boom thereafter , but neither did they spark it, nor did they sustain it before.

The chicken egg problem poses itself when we ask two related question: 1) How come China was able to attract so much FDI from the rest of East Asia? 2) How come China was able to utilize this technology to create jobs in a) domestic/public companies and b) in foreign owned companies. The answer to these questions are probably to be found in China's industrial policy.
 

robto

Ad Honorem
Jun 2014
6,069
Lisbon, Portugal
#10
Before China, Japan, the South Korea, Taiwan and Singapore had a boom (these are more relevant than a comparison with african countries that make no sense at all).... China was a major economic player for centuries, it was just a matter of time for it to regain its righful place.. Note that even at $8 000 per capita it is still seriously behind its neighbors (Taiwan $22 000 Korea $25 000)

China had law and order, a centralized bureaucracy, long term planss (in fact very long term when one compares to western countries) an educated population, a large domestic market and a history of innovation to support its growth
That's a good answer.

And yes, China GDP on a per capita basis is still very far behind from any developed nation, and I don't expect for that country to be trully developed in my life time.

What really made China to quick-start its rapid development was without a doubt its strong State-economic planning of de-regulation of the markets starting in 1978. Even nowadays the economy of China is still, even its market economy, dependent on State enterprise and bureaucratised control. One have to ponder if that economic model is sustainable at the long-term or not...history proves that it's not sustainable.

Note: we need to stop relying too much on GDP per capita. If we want to really evaluate the living standards of a country, GNI per capita and relying in the Human development index would be more reliable indicators of living standards than GDP per capita.
 

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