The China Puzzle

All about institutions? (2013/01/27)

A year ago, I went to University of Hong Kong in order to figure out, how China had been able to keep annual economic growth rates at around 10 percent. At the end of my stay I made a draft paper that summed up some of the explanations to the “Miracle” primarily based on the work of Professor Chenggang Xu. The main findings were, as summed up in the abstract in my paper below.

The growth miracle of China is often assigned with the ‘China puzzle’ since the most common factors and structural settings such as seperation of government and business, high protection of property rights and low level of corruption are not satisfied in the case of China. But maybe there is no China puzzle, maybe we just need to look somewhere different for the explanation. In the following paper I have examined the fundamental institutional setting of China in order to get a better understanding of the economic development everyone has been talking about for the last decade.

Firstly I have explained the relationship between the central and the local governments, which was shown to be an important part of the fundamental institution of China, which again was shown to play an important role in the growth miracle of China. Then examined how the local governments contributed to the development of the private sector and how the reform strategy of China in general have been experimental.

Finally I find that the fundamental institution of China has its problems, but that it can still be used as an example for developing countries.” Link to the rest of the paper here: What is to be learned from China.


A Word of Caution (2012/03/15)

When sitting in Starbucks at the University of Hong Kong today I came to eavesdrop on two Europeans sitting at the table behind me. They seem to be studying Chinese culture and law at the University – or from their conversation rather some introductory Common Core course on these topics. It is obvious that they are interested and that they try to impress each other with their knowledge on China. Yesterday I sat at the exact same table, and had their conversation with a friend of mine.

To some extend it is important that Europeans and everyone outside of China try to get to a deeper understanding of this country. It really is. In my Common Core class our professor recently gave us a brief introduction to the Cultural Revolution. On top of the factual explanations she gave us her personal history. So many things have happened to the people of China, which I – coming from Scandinavia where the time for food coupons and legal restrictions on mobility goes back to the time of the second world war and before – not 1993 – have no grounds to understand.

This is a word of caution, not just to others, but especially to myself, to bear in mind, when we are boasting about our recently achieved knowledge on the Chinese culture and history. There is still a long way to go.

Economic Reforms in North Korea? (2012/09/15)

DSCF0445Having studied the economic reforms in China and in this regard the set-up and ideas behind the Special Economic Zones in China I find it really interesting if these strategies are going to be implemented in North Korea. In september a suggestion of economic land reform that look similar to parts of the first economic reforms in China. The farmers will, if the changes are carried out, be allowed to keep what ever is left of their production after they have met some quota. This can then be sold on local farmer’s markets or traded for other goods. When similar changes were made in China, economic growth expanded – even after the corrections for data problems. (Lee, Jean H. September 2012)


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