China's Economic Transformation
Dan Blatt
In its July issue, FUTURECASTS online magazine - at
www.futurecasts.com - presents a Book Review: Chow, "China's Economic
Transformation," providing historic background information and analyses of
China's economic transformation process and its current economic
institutions. This book explains why the transformation process has worked
as well as it has and analyzes current problems and future prospects. It is
a fine - perhaps essential - source of information about China - the book to
read if you want to understand modern China. It is also an excellent -
perhaps essential - text for any course on modern China.
*
FUTURECASTS online magazine presents the most accurate, complete and
uncompromising reviews of books on consequential subjects available
anywhere.
*
In its August issue, FUTURECASTS will present a Book Review: De Soto:
"The Mystery of Capital," an illuminating explanation of third world poverty
and economic failure - and why most poverty stricken nations in fact have
enough capital and entrepreneurial talent to prosper.
*
If you would like to receive regular notification of FUTURECASTS monthly
issues, please email your name and email address.
*
Dan Blatt, Publisher,
FUTURECASTS online magazine,
www.futurecasts.com
bla...@futurecasts.com
MM
government owned production to private, and a lot of smoke and mirrors with
the books. It's not a lot different from any other heavily impoverished,
backward nation with a large source of cheap labor that benefits from import
of technology to create a rapid turnaround. It's not what China has done,
it's how China does over the next decade or two if it's going to try to
avoid being Japan v2.0 with an even bigger downside.
Tom Schoene
what. Go advertise your tripe somewhere else, thank you.
--
Tom Schoene (replace "invalid" with "net" to email)
"It is not knowledge, but the act of learning, not possession but
the act of getting there, which grants the greatest enjoyment."
Karl Friedrich Gauss
The Dunn Family
fact is that it's still socialist. The supposedly capitalist reforms
that have been made were enacted to create the appearance of free market
reform while at the same time maintaining a one party state; the
government retains control, and therefore ownership, of the commanding
heights of the economy. What China's really moving towards is fascism,
not capitalism. The real question is whether the Communist regime will
finish that transition and remain in power for decades to come or
whether it'll go the way of the Soviet Union.
bluerodeo2
"The Dunn Family" <dun...@erols.com> wrote in message
news:3D22FEC7...@erols.com...
> China's economy is making some moves in the right direction, but the
> fact is that it's still socialist. The supposedly capitalist reforms
> that have been made were enacted to create the appearance of free market
> reform while at the same time maintaining a one party state; the
> government retains control, and therefore ownership, of the commanding
> heights of the economy. What China's really moving towards is fascism,
> not capitalism. The real question is whether the Communist regime will
> finish that transition and remain in power for decades to come or
> whether it'll go the way of the Soviet Union.
Substitute the word Kanada for China.
A lot of similar themes huh?!
> MM wrote:
>
> >Why it's worked? It's not that hard: lot of cheap labor, conversion of
> >government owned production to private, and a lot of smoke and mirrors
with
> >the books. It's not a lot different from any other heavily impoverished,
> >backward nation with a large source of cheap labor that benefits from
import
> >of technology to create a rapid turnaround. It's not what China has
done,
> >it's how China does over the next decade or two if it's going to try to
> >avoid being Japan v2.0 with an even bigger downside.
> >
> >
>
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francispoon
> Why it's worked? It's not that hard: ,,,snupped... conversion of
> government owned production to private,
This point seems to make the most economic sense among all...
FP
francispoon
> fact is that it's still socialist. The supposedly capitalist reforms
> that have been made were enacted to create the appearance of free market
> reform
Appearance only??? Do you mean the private ownership is not legal in
China?
while at the same time maintaining a one party state;
Hong Kong under the British prior to its handover back to China had
been in a one party state for over 100 years but economically it
flourished very well. And HK was not a fascist state.
FP
bluerodeo2
"francispoon" <fyf...@hotmail.com> wrote in message
news:936eaee8.02070...@posting.google.com...
> The Dunn Family <dun...@erols.com> wrote in message
news:<3D22FEC7...@erols.com>...
> > China's economy is making some moves in the right direction, but the
> > fact is that it's still socialist. The supposedly capitalist reforms
> > that have been made were enacted to create the appearance of free market
> > reform
>
> Appearance only??? Do you mean the private ownership is not legal in
> China?
>
> while at the same time maintaining a one party state;
>
> Hong Kong under the British prior to its handover back to China had
> been in a one party state for over 100 years but economically it
> flourished very well. And HK was not a fascist state.
The key differnce being that Hong Kong was NOT, in those 100 years,
administered by Beijing... who don't have a record of competency, democracy
or capitalism. We will wait and see how they do but history doesn't speak
well of the record thusfar.
"fascist" or otherwise; it now appears that Shanghai will replace HK as the
new 'dynamic hub' in the PRC for business, culture etc. and that HK is being
incrementally diluted and constricted....de-clawed so to speak.
> FP
>
>
> the
> > government retains control, and therefore ownership, of the commanding
> > heights of the economy. What China's really moving towards is fascism,
> > not capitalism. The real question is whether the Communist regime will
> > finish that transition and remain in power for decades to come or
> > whether it'll go the way of the Soviet Union.
> >
> > MM wrote:
> >
> > >Why it's worked? It's not that hard: lot of cheap labor, conversion
of
> > >government owned production to private, and a lot of smoke and mirrors
with
> > >the books. It's not a lot different from any other heavily
impoverished,
> > >backward nation with a large source of cheap labor that benefits from
import
> > >of technology to create a rapid turnaround. It's not what China has
done,
> > >it's how China does over the next decade or two if it's going to try to
> > >avoid being Japan v2.0 with an even bigger downside.
> > >
> > >
francispoon
> "francispoon" <fyf...@hotmail.com> wrote in message
> news:936eaee8.02070...@posting.google.com...
> > The Dunn Family <dun...@erols.com> wrote in message
> news:<3D22FEC7...@erols.com>...
> > > China's economy is making some moves in the right direction, but the
> > > fact is that it's still socialist. The supposedly capitalist reforms
> > > that have been made were enacted to create the appearance of free market
> > > reform
> >
> > Appearance only??? Do you mean the private ownership is not legal in
> > China?
> >
> > while at the same time maintaining a one party state;
> >
> > Hong Kong under the British prior to its handover back to China had
> > been in a one party state for over 100 years but economically it
> > flourished very well. And HK was not a fascist state.
>
> The key differnce being that Hong Kong was NOT, in those 100 years,
> administered by Beijing... who don't have a record of competency, democracy
> or capitalism. We will wait and see how they do but history doesn't speak
> well of the record thusfar.
It obviously shows that you have not read enough records so far. The
TV show on 60 minutes demonstrates how Shanghai has transformed itself
from a greyish looking city to a modern city that even rivals LA in
some ways in a matter of 10 years! That is capitalism speaking! To
call China "communist" is to insult the founder of this ideology. Mao
would have been rather upset if he had the chance to see what China is
doing. But then again Mao was an economic ass.
> "fascist" or otherwise; it now appears that Shanghai will replace HK as the
> new 'dynamic hub' in the PRC for business, culture etc. and that HK is being
> incrementally diluted and constricted....de-clawed so to speak.
In order to be fair in your assessment of HK, you have to live in HK
as an ordinary citizen prior to the handover in order to realize what
"artificial prosperity" would have meant. HK was enjoying a false
sense of prosperity with a hypo-inflationaly economy in which only
those who were in the drug business could have afforded an apartment.
Prior to the handover, the property prices in HK went up by 8-10 times
in just a bit over 10 years. The people in HK were living on borrowed
wealth from the future. Now, you tell me. WHO engineered that
economic bubble in the first place? That bubble just happened to
burst soon after HK was returned to China. Was it the British
competence or conspiracy?
FP
bluerodeo2
which was allowed to exist; whether you happened to personally love the
benefits or whether you didn't benefit; because there was something akin to
a 'capitalist' system operating in HK.
The bubble probably burst because of the uncertainty created by the
perception of some risk with the return of HK to the hands of Beijing. "A
million dollars is nervous" is the old expression. But again I think it was
simple supply and demand. People crystallized their gains and ran for the
markets that they perceived as less risky.
Human psychology....not conspiracy.
francispoon
You simply go and examine the joint Sino-British agreement prior to
the handover and you will discover that there is a limit on the sale
of land restricted to 50 acres per year prior to the handover. Any
student who has done econ100 and 101 would have told you what would
have happened when the supply was reduced deliberately by the
government. I don't put all the blame on the British side though with
their _centuries_ of experience and economic intelligence they could
have known what would have happened and could have warned the Chinese
leadership in Peking. I do, however, have to say this: if you see a
child about to stumble into a well ahead of him and you don't do
anything to stop him, you are equivalent to have committed the
murder....OR, if you know in advance a landmine is placed ahead of
someone about to walk on it, and you don't do anything to alert that
person to the danger, you are in a way equivalent to having killed
that person. Prior to the handover, the communist regime in Peking
was still a rather closed, suspicious kind of regime as compared to
what it is now. That regime at that time was dominated by bureacrats
as opposed to the one now by technocrats. At that time the political
officers had more to say in the PRC government than the technocrats.
It was only after they had got clubbered by the economic disasters
which they did not know how to handle, the technocrats got their way
in the government. The British political technocrats, with their
experience in economic and political engineering, simply went along
with the naivity of the PRC political officers and 'smiled'(grimmed)
on the side...leaving millions in HK now to suffer.
Was it an accident or by design?? You are the judge.
FP
Bb99
Plus your own bizarre historical associations and connections?!
francispoon
Which government was in control of the money supply in the colony
prior to the handover? Hypo-inflation is too much money chasing too
few goods. A small apartment in HK which sold for about US$50,000 in
1986 went for app. half a million US$ prior to the handover in 1997.
That was COMPETENT 'engineering' of the British government in HK
DESIGNED by those who had graduated from Oxford.
> Plus your own bizarre historical associations and connections?!
*your own*? You meant China's, right? Yes, looking back in
retrospective, its historical associations and connections with the
Russians and their central-controlled economy philosophy did result in
the political coercion and poverty of the country, and left many of
its political officers ignorant of the market mechanism, but its
historical connections with the west were not totally shiny either.
FP
Zbot
Hers's a little nugget of insight from one of your own countrymen that I
thought you would find instructive:
National Post
Thursday, July 11, 2002
When the so-called "one country, two systems" formula was implemented five
years ago, the world hoped that the democratic elements of Hong Kong would
somehow find their way to Beijing and the mainland would be steered toward
the freedoms enjoyed by the former colony (Editorial, Whither Hong Kong,
July 9).
Sadly, it has taken only five short years to see that a "mainlandization" of
Hong Kong has taken place and, despite the promised 50 years of continuity,
Beijing has ensured that the same authoritarian forces that have kept its
citizens in check on the mainland have crept into every major area of life
in Hong Kong. The auspices can hardly be gloomier for whatever happens next.
Since 1997, intensified bilateral interaction has pulled Hong Kong under the
increasing influence of mainland China. Consequently, the freedom and
efficiency that made Hong Kong the pearl of the East has become tarnished as
citizens endure rising unemployment, a stagnant economy and the citation of
the omnipresent Public Order Ordinance to arrest student movement leaders.
In addition, press freedom and judicial independence have shown the greatest
slide ever as witnessed by the firing of dissenting editors and the
overturning of Hong Kong's court ruling on the right of residence for
illegitimate children. As for the government, with the territory being run
by an unelected posse responsible only to their equally unelected masters in
Beijing, the system is now less accountable than it was under British
colonial rule!
Hong Kong was supposed to be the showcase that proved that "one country, two
systems" was viable. How, then, is this going to appeal to the people of
Taiwan? If Taiwan were to go the way of Hong Kong, Beijing would similarly
dissolve the elected legislature and supply a leader who would stack the
Cabinet with political yes-men who could only be removed at his discretion.
It would undermine Taiwan's sovereignty and accountability as well as any
hard-won rights and freedoms that stand in the way of the Communist
government's agenda. Whither Hong Kong? A place Taiwan dare not go.
Dennis Su, Willowdale, Ont.
~Amen
francispoon
> "francispoon" <fyf...@hotmail.com> wrote in message
> news:936eaee8.0207...@posting.google.com...
> Hers's a little nugget of insight from one of your own countrymen that I
> thought you would find instructive:
Thank you for showing me the article. I have read many like that.
But that is not the issue I was touching on. The issue I touched on
was: was the hypo-inflation PRIOR TO THE HANDOVER of Hong Kong to
China an accident or a conspiracy under the British government? The
issue you want me to read is: has the political freedom promised in
the joint declaration been cashed out as it was promised. Most people
in HK, who have been traditionally apolitical, now are more concerned
with the economic ruins created by the burst of that hypo=inflationary
bubble than the political freedom as promised. You are not going to
forget that HK had hardly enjoyed much democracy and political freedom
until only a short while before the British left. It was just a bit
too little and too late. Why did the British not give the people of
HK democracy which the people back home in UK have been enjoying for
centuries? The current economic mess is not created by the lack of
political freedom in certain areas after the handover but has been the
legacy of state terrorism engineered by those who left.
FP
francispoon
the British before they pulled out_, would NOT want to see free
election in HK with its governor chosen by the people of HK. So both
of them, the PRC and the British governments, are at parity to each
other in terms of suppressing democracy.
Politics aside, I am showing you below what I wrote to my friends that
in my view is closer to reality of the down to earth day to day life
in this ex-colony than the theoretical abstracts by which you have
been entertained. And it is more interesting too!
=======================================
The economic terrorism performed by the government of Great Briton on
the people of Hong Kong is as follows:
(1)During the blow-up process of the property market bubble in HK
prior to the handover, the people of HK were made to live on the
wealth that was borrowed from the future. Now the pipers are coming up
for payment and the pain is on. It will take many many years and much
more pain in order to pay off this amount of 'spent wealth'. Some
people have even committed suicide for their financial sorrows.
(2)During the same period, many companies in HK channelled or
misallocated their corporate resources to property speculation, and in
the process de-emphasizded or put less emphasis on the training and
development of human resources. Now, HK is a first class city in terms
of its physical infrastructure but operated by a bunch of 'third
world' personnels. These people are unable to bring HK up for
competition against other advanced centres in the area of
capital-intensive industries. And these people have zero chance when
having to compete with the mainlanders for labor-intensive production.
So they have had it!
(3)During the same time period, the inhabitants of HK, being deluded
by a sense of false prosperity, saved less than they would have done
without that sense of artificial prosperity created by a
hypo-inflationary bubble.
Salvation Method: Do a "people swap" with the mainland in which the
elitist technical personnels come to live in HK and the natives of HK,
now broken financially and in spirit, go and live among the poor
peasants in China. The leggies, cigarettes, wine and other life
essentials are much cheaper over there, which if properly consumed,
compensate the loss of purchasing power from their drastically
curtailed income.
===============================================
"Zbot" <N...@suyana.net> wrote in message news:<65hX8.2318$f5.100078@news>...
bluerodeo2
> "Zbot" <N...@suyana.net> wrote in message
news:<65hX8.2318$f5.100078@news>...
> > "francispoon" <fyf...@hotmail.com> wrote in message
> > news:936eaee8.0207...@posting.google.com...
> > Hers's a little nugget of insight from one of your own countrymen that I
> > thought you would find instructive:
>
> Thank you for showing me the article. I have read many like that.
> But that is not the issue I was touching on. The issue I touched on
> was: was the hypo-inflation PRIOR TO THE HANDOVER of Hong Kong to
> China an accident or a conspiracy under the British government? The
> issue you want me to read is: has the political freedom promised in
> the joint declaration been cashed out as it was promised. Most people
> in HK, who have been traditionally apolitical, now are more concerned
> with the economic ruins created by the burst of that hypo=inflationary
> bubble than the political freedom as promised. You are not going to
> forget that HK had hardly enjoyed much democracy and political freedom
> until only a short while before the British left. It was just a bit
> too little and too late. Why did the British not give the people of
> HK democracy which the people back home in UK have been enjoying for
> centuries? The current economic mess is not created by the lack of
> political freedom in certain areas after the handover but has been the
> legacy of state terrorism engineered by those who left.
I disagree.
bluerodeo2
> There is NO question that the dictatorship in Peking, _like that of
> the British before they pulled out_, would NOT want to see free
> election in HK with its governor chosen by the people of HK. So both
> of them, the PRC and the British governments, are at parity to each
> other in terms of suppressing democracy.
>
> Politics aside, I am showing you below what I wrote to my friends that
> in my view is closer to reality of the down to earth day to day life
> in this ex-colony than the theoretical abstracts by which you have
> been entertained. And it is more interesting too!
>
> =======================================
>
> The economic terrorism performed by the government of Great Briton on
> the people of Hong Kong is as follows:
>
> (1)During the blow-up process of the property market bubble in HK
> prior to the handover, the people of HK were made to live on the
> wealth that was borrowed from the future.
They made it. They were greedy also but that is neither here nor there.
> Now the pipers are coming up
> for payment and the pain is on.
They speculated and lost. Classic bubble popped by supply and demand and
market insecurities.
Same happens here.
>It will take many many years and much
> more pain in order to pay off this amount of 'spent wealth'.
They signed mortgages of their own free will.
Many have just walked on the mortgage when the price of the real estate is
more than the mortgage.
That's capitalism, love it or hate it. Same happens here.
>Some
> people have even committed suicide for their financial sorrows.
Same happens here.
> (2)During the same period, many companies in HK channelled or
> misallocated their corporate resources to property speculation, and in
> the process de-emphasizded or put less emphasis on the training and
> development of human resources. Now, HK is a first class city in terms
> of its physical infrastructure but operated by a bunch of 'third
> world' personnels. These people are unable to bring HK up for
> competition against other advanced centres in the area of
> capital-intensive industries. And these people have zero chance when
> having to compete with the mainlanders for labor-intensive production.
> So they have had it!
Bad management decisions.
Same happens here to thousands of people here.....Enron, World Com etc etc.
> (3)During the same time period, the inhabitants of HK, being deluded
> by a sense of false prosperity, saved less than they would have done
> without that sense of artificial prosperity created by a
> hypo-inflationary bubble.
They got greedy and got stung. That's capitalism, same happens here.
> Salvation Method: Do a "people swap" with the mainland in which the
> elitist technical personnels come to live in HK and the natives of HK,
> now broken financially and in spirit, go and live among the poor
> peasants in China. The leggies, cigarettes, wine and other life
> essentials are much cheaper over there, which if properly consumed,
> compensate the loss of purchasing power from their drastically
> curtailed income.
Well that's something I do not have knowledge of.
Sounds awful.
bluerodeo2
Ooops... make that when the price of the real estate is LESS than the
mortgage commtiment!
francispoon
with you, which does not really reflect what the true picture is like.
I have the following to share with you.
Just to be fair for the British, it takes two to tangle. These two
sides include (1) crooks in the government of London, and (2)crooks in
the Peking government. Both sides were quite aware that the HK
economy was being pumped up by the excessive amount of money and both
sides were aware of its implications when the bubble burst. Though
the British authority in HK had been solely in charge of the money
supply or the printing press prior to the handover, they still would
not have dared to have done something like that without the subtle
approval from both sides, London and Peking. But since it was the
last chance to have another go at the golden goose so these crooks
might as well have another go at it while it lasted. These crooks
left the table before the music stopped...and the bag-holders are the
ordinary people who just bought houses as a home to stay rather than
to speculate. If the economy in HK still had remained as vibrant as
it was even with the burst, they could still have been able to afford
the mortgage. But once the bubble burst, the economy went into a ruin
and their jobs and the related income are on the line... Those who are
in charge of the government had known exactly what would have happened
but continued to pump excessive amount of credit into the economy to
make inflation not just high but hypo-high. That was not an accident.
You can also blame on the ordinary Germans for having done as daily
activities during the hypo-inflationary period prior to the rise of
Hilter. But people and their behavior are the products of their
environment and it is the moral duty of a governmen to ensure that the
environment does not lead to destructive behavior of its citizens.
A government is a thief licensed to rob in broad daylight, whether or
not it is the government of the Bush boys, or the kings and queens in
UK...or Mao in China or the one under Cretin in Canada. You as a
private citizen had better protect your own ass in order that the
government will not make a hole where it has already got one...
FP
"bluerodeo2" <b...@aol.com> wrote in message news:<JUAX8.22176$WJf1...@news01.bloor.is.net.cable.rogers.com>...
blueodeo2
> private citizen had better protect your own ass in order that the
> government will not make a hole where it has already got one...
>
> FP
Oh; that's my full time profession in life!
francispoon
I am NOT prejudiced against any government while I am against all of
them. Before I round up this discussion, I would like to summarize
what I have been saying all along and see if you or the other viewers
can make any sense out of it.
(1)The property bubble in HK in that 10 years' period prior to the
handover is only a part of the overall economic bubble in the
hypo-inflationary environment of HK. Inflation does but distribute
wealth from the poor to the rich.
(2)That bubble, gigantic as it was, was the result of too much money
chasing too few goods or, in economists' technical jargons, the rate
of money growth exceeded the rate of productivity growth by a LONG
shot.
(3)The authority in charge of the money supply or printing money was
in the hands of the government prior to the handover and it was
British. Who else?
(4)Was the HK authority under the British acting independently in the
interests of the local inhabitants or was it acting with an eye on the
political-commercial interests of certain powerful groups? They of
course knew what they were doing. It is the lower-middle classes of HK
that have been screwed and currently they have got two holes on their
asses.
FP
teal_rodeo
"francispoon" <fyf...@hotmail.com> wrote in message
news:936eaee8.02071...@posting.google.com...
> "blueodeo2" <p...@irtol.net> wrote in message
news:<XpXY8.18817$WsS...@news01.bloor.is.net.cable.rogers.com>...
> > "francispoon" <fyf...@hotmail.com> wrote in message
> > news:936eaee8.02071...@posting.google.com...
> > > You as a
> > > private citizen had better protect your own ass in order that the
> > > government will not make a hole where it has already got one...
> > >
> > > FP
> >
> > Oh; that's my full time profession in life!
>
> I am NOT prejudiced against any government while I am against all of
> them. Before I round up this discussion, I would like to summarize
> what I have been saying all along and see if you or the other viewers
> can make any sense out of it.
>
Supply and demand, human nature and.....greed.
francispoon
> "francispoon" <fyf...@hotmail.com> wrote in message
> news:936eaee8.02071...@posting.google.com...
> > "blueodeo2" <p...@irtol.net> wrote in message
> news:<XpXY8.18817$WsS...@news01.bloor.is.net.cable.rogers.com>...
> > > "francispoon" <fyf...@hotmail.com> wrote in message
> > > news:936eaee8.02071...@posting.google.com...
> > > > You as a
> > > > private citizen had better protect your own ass in order that the
> > > > government will not make a hole where it has already got one...
> > > >
> > > > FP
> > >
> > > Oh; that's my full time profession in life!
> >
> > I am NOT prejudiced against any government while I am against all of
> > them. Before I round up this discussion, I would like to summarize
> > what I have been saying all along and see if you or the other viewers
> > can make any sense out of it.
> >
> > (1)The property bubble in HK ...
>
> Supply and demand, human nature and.....greed.
Go to the University of Toronto and take an introductory course in
economics. Then perhaps we can speak the same language. Many social
issues do seem like "common sense" while they aren't.
FP
magenta_rodeo5
Only in your demented brain francis!
magenta_rodeo5
Only in your demented brain francis!