Chinese economic miracle. China's economic miracle: the secret behind China's economic miracle

The unprecedented rates of China's economic development have been talked about for a long time. This phenomenon was even given a mysterious name - "economic miracle". However, has the ruling Communist Party in the PRC really come up with an effective way of developing the country? And what does this "miracle" consist of?

The first step of the Communist Party on this path of development was the adoption of the law on registration. All citizens of the country were officially divided into peasants and townspeople. If you were born into a peasant family, then you can never change your status.

The propiska regime significantly limited the possibilities of rural residents in comparison with their fellow townspeople. For example, in the right to receive higher education, pension and medical insurance, and other types of social security. The level of taxation of peasants is also much higher than that of urban dwellers.

Let's not forget that China is an agrarian country, as farmers make up over 65% of the country's population.

By adopting the registration law, the authorities have effectively turned most of the Chinese into a workforce ready to work for a penny.

Realizing that because of the poverty of the population, it is impossible to increase the income of the state at the expense of domestic demand, the Communist Party was forced to open the "iron curtain" by starting the so-called policy of reforms and opening up.

The cheap labor force led to the low cost of goods. The country quickly became a global factory. Western investments poured into China, and mass production of goods for export began. Money poured into the treasury of the Communist Party in a large stream.

After several unsuccessful political campaigns such as the "Cultural Revolution", "Great Leap Forward" and others, in addition to increased poverty, the authority of the party itself was also undermined. Therefore, in order to strengthen the consciousness among the masses that the country is moving in the right direction under the "skillful leadership of the party", and also in order to increase its authority in the international arena, the authorities began to invest part of the profits in creating signs of a developed state.

In large cities of China, like mushrooms after a rain, skyscrapers, hotels, stadiums began to grow, infrastructure changed, and the latest achievements of scientific and technological progress were introduced. The Communist Party effectively copies from developed countries everything with which, at a cursory glance, a developed society is associated. This is how magnetic levitation trains, five-star public toilets, high-speed Internet, and numerous international exhibitions appeared in China. The Western media often report on Chinese millionaires and billionaires, whose number is constantly growing, even despite the impact of the global economic crisis.

In fact, it turns out that the population of all of China is working on the development of only a small part of this country. At the same time, it works sparingly, very diligently and patiently. The fact is that living in poverty for a long time, and even more so after going through all the horrors of the Cultural Revolution and the artificial famine that resulted from the Great Leap Forward campaign, the Chinese have developed a psychology of fear of poverty. The older generation unconsciously passes on this psychology to the younger. Regardless of income, even if they are very small, absolutely every Chinese person saves a part from each salary for a rainy day. This psychology also makes them willing to take any job and work hard if there is even the slightest opportunity to make money.

At the same time, most of the labor force receives from the profit the minimum necessary only to maintain its existence.

This can be seen even from small statistics:

According to the official data of the Chinese authorities, the 10% of the richest residents of the country have 50% of the total income of the population, while the 10% of the poorest residents have only 1.4%.

The Gini coefficient, which reflects the gap between the poor and the rich, is constantly growing in China, and in 2006 it was 0.496 (less than 0.3 is considered normal, and the maximum is 1); for comparison: in India, this coefficient is 0.32 and has been at this level for almost 50 years.

In terms of GDP per capita, China is not even included in the first hundred countries and is in 111th place in the world (for comparison, Russia is in 67th place).

According to consulting firm McKinsey & Company, only less than 1% of Chinese families have incomes equal to or greater than the average incomes of American families.

The Chinese authorities also spare no effort and money for the massive propaganda of all their achievements, presenting them, especially domestically, as the “new China” (“Xinhua”) created by the Communist Party. However, if we lift the curtain a little from the indicators of the incredible economic growth of the PRC, which are abundantly poured by Chinese officials, as well as from these showcase cities that are extensively shown to Western people, then we are faced with a completely different China.

What has been happening all these years in China cannot be called the development of the country, since initially the ruling elite was not at all tasked with raising the welfare of the people. Under this development model, on the contrary, the majority of the country's inhabitants must be poor, otherwise no "economic miracle" will work. The main driving force of the totalitarian government was and remains the strengthening of its power and enrichment of itself, and we see that this goal has been achieved.

The Communist Party cannot afford to lose its main source of income - the cheap labor of the peasants, therefore, in this system, the destiny of this category of citizens is to remain poor forever. This is also confirmed by statistics: according to official data, the income of the country's wealthy residents is 11 times higher than the income of the poor, and according to the Beijing National Economic Research Institute, 31 times, and this gap is constantly increasing. There is practically no middle class in China.

The form of development chosen by the authorities has formed a system for solving social and other problems, often only by improving statistical indicators. Official statistics in China absolutely do not reflect the real state of affairs. Local officials write "positive" reports, but real problems remain unresolved and are constantly piling up. In this regard, the number of popular protests in China is increasing every year. Only according to the official data of the Chinese authorities, in 2008 there were more than 80 thousand riots in the country, which is 10 times more than in 1993.

Thus, we can say with confidence that this "economic miracle" will not last long, this bubble will certainly burst, the question is only in time.

You can read about the price China pays for this "economic miracle" in the article: "

ECONOMIC MIRACLE IN CHINA

One of the most important events in world economic history in the last quarter of the 20th century was the unprecedented success of the Chinese economy. From the beginning of economic reforms in 1978 to 1997, the gross domestic product of this country increased by 5.7 times, or by 9.6% on average per year. (graph. 1). This means that it has doubled at a record rate - every 7.5 years!

Over the past 19 years, the production of GDP per capita in China has increased 4.4 times, labor productivity (GDP per person employed) - 3.6 times (Table 1). Over the same years, Russia's GDP decreased by 30%.

If in 1978 the Chinese GDP was 23% less than the Russian one, then in 1997 it already exceeded the Russian one by 6.2 times. If in 1978 the per capita production of GDP in China was 11% of the Russian level, then in 1990 it rose to 23%, and by 1997 it had already reached 75%.

Table 1. Economic growth in China and Russia

PPP in 1993 prices	China in% to Russia		Average annual growth rates,%
		China 1978-1997		Russia in 1990-1997
GDP, USD billion USA
GDP per capita, dollars USA
GDP per 1 employed, dollars USA

If the development trends that have developed in the last decade persist in the Chinese economy in the near future, and even with a significant acceleration of economic growth in Russia (up to 4-5% annually), no later than 2005, China will bypass Russia in terms of GDP per capita (graph. 2). By this time, the Chinese economy will surpass the American one in terms of GDP and become the largest in the world.

Graph 2. GDP per capita in Kita (Russia = 100%)

There are several hypotheses trying to explain the Chinese miracle.

EXPLANATIONS OF THE CHINESE ECONOMIC MIRACLE

Hypothesis 1 - backwardness. It is argued that the Chinese economy is growing so rapidly because the level of development in China was low and the growth rate of the underdeveloped countries is higher than that of the more developed countries.

Graph 3 shows that such a pattern does not exist. With the same per capita GDP indicators, both rapid growth and deep decline are possible. No other underdeveloped country has had a growth rate anywhere close to that of China. Moreover, China's growth rate has proven to be unique for the entire global economy.

Graph 3. Level of economic development and rates of economic growth in 1979-1996 (209 countries)

Hypothesis 2 - features of the structure of production. It is argued that the structure of the Chinese economy - a low share of industry and a high share of agriculture - has made a decisive contribution to the acceleration of economic growth.

In fact, contrary to widespread misconceptions, the share of industry in GDP in China was not lower, but higher than in Russia. (Table 2). However, the lower share of industry in Russia did not contribute to an increase in the rate of its economic growth. Conversely, China's higher score did not slow its growth rate relative to Russia.

Table 2. Sectoral structure of the economy,%

Indicators
Indicators
GDP total, including:
Agriculture and forestry

Services sector
All busy including
Agriculture and forestry
Industry and construction
Services sector

Hypothesis 3 - features of the structure of employment.

It is argued that the higher growth rates in China are due to the high share of the agricultural population at the beginning of the reforms. (Table 2).

Chart 4

shows that the rate of economic growth does not depend on the structure of the employed population. With the share of people employed in agriculture at a level close to 70.5% (China in 1978), the values of the average annual rates of economic growth in different countries range from -6.0% to + 8.2%. Consequently, the structure of employment does not explain the high rate of economic growth in China.

Graph 4. Share of people employed in rural areas

Hypothesis 4 - national specificity.

It is argued that the phenomenal results of China's economic development are due to the unique features of the Chinese national character, including such as hard work, dedication, and unpretentiousness.

If this were the case, then China would be distinguished by high rates of economic development throughout its history. However, during the first three quarters of the 20th century, the Chinese economy had very low growth rates, which periodically turned negative. Until recently, China was one of the poorest countries in the world, and the real threat of hunger was eliminated only a few years ago. In 1952-1978. GDP per capita in China has decreased both in relation to Russian and in relation to the world average (Table 3, column 5).

Table 3. GDP per capita at PPP in 1993 yen

Indicators	Before the start of reforms in China	Since the beginning of reforms in China
Indicators
In dollars. USA:



% To the world:



% To Russia

Graph 5. GDP per capita in China in% of Russia in 1952-1978.

Only at the end of the 70s there was a turning point in development trends, and China began to reduce its lag behind many countries of the world, including Russia, with great speed. Thus, it was only at the end of the 70s that something happened in China that set in motion a huge development potential, the existence of which many did not even suspect. Obviously, these radical changes were caused precisely by economic reforms.

Hypothesis 5 - the nature of economic policy. Therefore, it seems quite obvious that the success of the Chinese economy is due to the applied model of economic reform. In contrast to Russia, where liberal reforms (the so-called shock therapy) were allegedly carried out, in China the reforms were of a gradual (gradualist) nature. Unlike Russia, where the state "withdrew" from the economy, in China the state retained significant control over the economy, and its role in economic development has increased markedly.

To test this hypothesis, let us consider the extent to which the results of economic development depend on the scale of state participation in the country's economic life.

TYPES OF ECONOMIC REFORMS

For each of the main directions of economic policy (employment policy, social, foreign economic, monetary, budgetary), the most important indicators of state participation in economic life are determined. Their different values, as well as the direction and speed of their change, indicate the implementation of one or another model of economic reforms. (Table 4).

Table 4. Types of economic reforms

Directions of economic policy	Indicators	Indicator values depending on the type of economic reforms

		Gradual(gradualistic, with significant government intervention)	Liberal (fast, so-called shock therapy)
1. Employment policy	Share in the total number of employed:
	Employed in the public sector
	Employed in the state administration
2. Social policy	Social subsidies as% of GDP
2. Social policy	The proportion of people receiving benefits and subsidies from the state. budget, in the total population
3. Foreign economic policy	Import duties in% of import volume
3. Foreign economic policy	Average annual rate of depreciation of the exchange rate,%
4. Monetary policy	Average annual rate,
	Increase in Central Bank loans
	%: - growth of money supply
4. Budgetary policy	% Of GDP:
	Government taxes
	Government spending,
	Government subsidies
	Government consumption
	Budget deficit
	State debt

If the values of indicators characterizing the degree of government intervention in economic life are high, or increase, or decrease, but slowly, then this indicates a gradual, gradualistic version of economic reforms.

If the values of the indicators characterizing the degree of state intervention in economic life are low, or decrease, or decrease especially rapidly, then this indicates the liberal nature of the variant of the economic reforms being carried out.

NATURE OF ECONOMIC POLICY IN CHINA AND RUSSIA

Employment policy. In the first two years of economic reforms in China, the share of employed in the public sector decreased from 94.9% to 26.6%. By 1995, it had dropped to 18.9%. After six years of economic reforms in Russia, the share of employment in the public sector remains higher than in China after two years of reforms and is almost double that in China today. (Table 5).

Table 5. Employment policy, social policy

Indicators
Indicators
Share in the number of employed,%:
Employed in the public sector
Employed in the state administration
Share of the population of persons receiving benefits and subsidies from the state budget,%
Social security spending as% of GDP
Unemployment rate, %

Specific gravity employed in the state administration increased in both countries: in China over 17 years - by 40%, in Russia over 6 years - by 90%. At present, the Russian figure is 2.6 times higher than the Chinese, and after the reduction in the number of the administrative apparatus in China by 4 million people, announced at the last session of the NPC , will exceed it by four times

Social politics. Sharepersons receiving benefits, subsidies and subsidies from the state budget , quite low in China and at the beginning of the reforms, was subsequently reduced by half. In contrast, the share of people receiving financial support from the budget in Russia, and at the beginning of the reforms exceeded the Chinese level by more than four times, over the past 6 years has increased by another 16%. Now the gap in these indicators between Russia and China is eightfold.

Thanks to both a decrease in the number of people receiving support from the budget and a decrease in the amount of benefits per person on average, the total amount social security spending and consumer subsidies v China decreased from 4.0 to 0.9% of GDP. In contrast, social spending in Russia not only did not decrease, but also increased significantly - from 6.3 to 12.6% of GDP. Now the gap in these indicators between Russia and China has grown to fourteen times.

As a result of reduced spending on unemployment benefits in China, incentives for registering able-bodied citizens as unemployed have noticeably decreased. Unemployment rate decreased by almost half - from 5.3 to 2.9%, and share of employed in the entire population rose from 42.3% in 1978 to 53% in 1997, which contributed to the acceleration of economic development. Due to the increase in social spending in Russia, incentives for the participation of able-bodied citizens in productive activities have noticeably decreased. Largely due to this, the unemployment rate increased from 2.6% in 1991 to 9% in 1997, while the share of the employed in the total population fell from 49.7% to 44.4%. The decline in the number of employed and their share in the total population contributed to the deepening of the economic crisis in Russia.

Foreign economic policy. Liberalization of foreign economic activity in China has led to a reduction in the actually levied import customs duties from 17.7% of imports in 1978 to 2.5% in 1996. In contrast, Russia underwent a transition from a relatively liberal foreign trade policy to protectionism - the ratio of import duties to total imports increased from 0.7 % in 1992 to 5.3% in 1997 (Table 6).

Table 6. Foreign economic policy and its results

Indicators
Indicators
Import duties in% of import
Growth rates,%:
Export
Import
% Of GDP:
Export

Share of machinery and equipment in exports,%
Foreign investment as% of GDP

China practically did not use such an instrument of protectionist policy as devaluation of the national currency. Average annual rate of depreciation of the exchange rate in 1979-1997 (8.3%) were quite moderate. In contrast, the average annual rate of depreciation of the exchange rate in Russia was almost 12 times higher.

Just four decades ago, a country like China had a rather weak, lagging economy. The economic reforms that have taken place over the years, which have made the country's economy more liberal, are considered to be a Chinese economic miracle. The growth rates of the economy over the past 30 years are incredible and amazing: on average, the country's GDP grew by 10% per year, and GDP per capita grew by 9%. Today China occupies a leading position among the world's economies. Consider how this country managed to achieve such indicators, how an economic miracle took place, what are its causes and what situation preceded it.

China in the middle of the twentieth century

After the end of World War II, China stood at a crossroads and did not know what to choose: the liberal capitalist or, following the example of the great power of the USSR, the socialist path of development. The civil war that shook the country until 1949 led to the secession of the island of Taiwan and the creation of the People's Republic of China, headed by Mao Zedong.

With the advent of the Communist Party, the painful construction of socialism begins: the nationalization of property and the implementation of agrarian reform, the implementation of five-year plans for the development of the economy ... Accepting help from the USSR and focusing on the political and economic system of its socialist neighbor, China is industrializing the economy. Sometimes it was necessary to resort to tough and uncompromising methods.

The Great Leap Forward to Nowhere

However, after 1957, relations between China and the USSR cooled down, and Mao Zedong, who did not share the views of the then Soviet leadership, decided to implement a new program called the Great Leap Forward. The goal of the ambitious program was to dramatically develop the economy, but the new direction was unsuccessful and had tragic consequences both for the people and for the Chinese economy as a whole.

In the 60s, the country is experiencing severe famine, a cultural revolution and massive repression. Many state instruments ceased to function, the communist party system collapsed. But in the early 70s, the government took a course towards restoring party organizations and improving relations with the United States. After the death of the "Great Helmsman" Mao Zedong in 1976, the country found itself in a difficult economic situation, unemployment increased, and the rationing system was introduced.

From the end of 1976, Hua Guofeng became the head of China. But the de facto reins of power are being taken over by Deng Xiaoping, a politician who fell into the millstones of the Cultural Revolution and was reinstated as China's vice premier in 1977.

Decisive plenum

Considering the Great Leap Forward program to be largely erroneous, Deng Xiaoping, relying on the support of the Communist Party, is launching a program to modernize the economy. In 1978, at the next plenum of the Communist Party, the course towards a socialist market economy was officially proclaimed, in which two economic systems would be combined: a planned distribution system and a market economy.

The new government path is called the course of reform and opening up. Xiaoping's liberal reforms are based on the gradual transition of economic structures to market rails and the preservation of the communist system. assured that all transformations will take place under the leadership of the Communist Party, and the dictatorship of the proletariat will be strengthened.

Highlights of change and reform

In a nutshell, the Chinese economy should be focused on export production and massive investment attraction. From that moment on, the Celestial Empire proclaimed itself a country open to expanding ties with other states, which attracted foreign investors. And the liberalization of foreign trade and the creation of special economic zones for foreign entrepreneurs led to an unprecedented increase in export indicators.

First of all, Xiaoping is reducing state control over many sectors of the economy and expanding the managerial functions of business leaders. The development of the private sector was encouraged in every possible way, and stock markets appeared. Serious transformations have affected the agricultural sector and industry.

Four stages

In the course of the entire reform of the Chinese economy, four time stages can be distinguished, carried out under a certain slogan. The first (from 1978 to 1984) stage, which implies transformations in the countryside, the creation of special economic zones, had the following slogan: “The basis is a planned economy. Supplement - market regulation ”.

The second (from 1984 to 1991) stage is the shift of attention from the agricultural sector to urban enterprises, the expansion of their field of activity and independence. Market pricing is being introduced, the social sphere, science and education are being reformed. This stage is called "Planned Commodity Economy".

The third (from 1992 to 2002) stage was held under the slogan "Socialist Market Economy". At this time, a new economic system is being formed, which implies the further development of the market and determines the instruments of macro-regulation of state control on a new basis.

The fourth (from 2003 to the present day) is designated as the "Stage of improvement of the socialist market economy."

Agricultural transformation

The Chinese economic miracle began with the transformation The essence of the agrarian reform was the abolition of the then existing people's communes and the transition to a family contract with a single collective property. This meant the transfer of land to the Chinese peasants for a period of up to fifty years, part of the products received from this land was given to the state. Also, free pricing was introduced for peasant products, and market trade in agricultural products was allowed.

As a result of such transformations, agriculture received an impetus for development and came out of stagnation. The new established system of collective property and family contracting qualitatively raised the living standards of peasants and helped to solve the food problem.

Industrial transformation

The economic system of industrial enterprises was almost freed from directive planning, they were supposed to be turned into self-sufficient enterprises with the possibility of independent marketing of products. Large strategic enterprises remain under the control of the state, while medium and small ones are given the right not only to manage the economy, but also to change the form of ownership. All this contributed to the fact that the state focused on improving the state of affairs in large state-owned enterprises and did not interfere with the development of the private sector.

The imbalance in the production of heavy industry and consumer goods is gradually decreasing. The economy begins to turn towards an increase in the production of goods for domestic consumption, especially since the large population of China contributes to this.

Special economic zones, tax and banking systems

By 1982, as an experiment, some coastal regions of China declared themselves special economic zones, and after the 1984 plenum, 14 cities in total were approved as special economic zones. The purpose of the formation of these zones was to attract foreign investment in China's industry and the development of new technologies, accelerate the economic development of these regions, and the country's economy entering the international arena.

The reforms also affected the tax, banking and currency systems. Value added taxes, a single income tax for organizations are being introduced. Most of the revenues began to flow to central budgets thanks to the new distribution system between local administrations and the central government.

The banking system of the country was divided into state banks, pursuing the economic policy of the government, and other credit and financial organizations on a commercial basis. Foreign exchange rates have now set off on a "free float", which was regulated only by the market.

The fruits of reforms

The Chinese economic miracle began to manifest itself already in the late 1980s. The results of the transformations have had a qualitative impact on the lives of ordinary citizens. The unemployment rates are reduced by 3 times, the retail turnover is doubling. The volume of foreign trade by 1987 increased by 4 times in comparison with 1978. Billions of dollars in foreign investment were attracted and by 1989 there were 19,000 joint ventures.

If we talk about China, it was manifested in a decrease in the share of heavy industry and an increase in the production of consumer goods and light industry. The service sector is expanding significantly.

Struck by unprecedented growth rates: 12-14% in the early 90s. Many experts during these years talked about the phenomenon of the Chinese economic miracle and predicted China's role as an economic superpower of the 21st century.

Negative consequences of reforms

As with any medal, the Chinese reforms had two sides - positive and negative. One of these negative aspects was the threat of inflation, which followed as a side effect of productivity growth after reforms in the agricultural sector. Also, as a result of the price reform, the situation in the industrial sector worsened. Unrest began, resulting in student demonstrations, as a result of which Secretary General Hu Yaobang was dismissed.

Only in the early 90s, the course of accelerating and improving the economic environment, proposed by Deng Xiaoping, helped to overcome the overheating of the economy, to create systems to control inflation and the country's development.

China's economic miracle and its causes

So now for the reasons. Studying the phenomenon of China's economic miracle, many experts put forward the following reasons for the economic recovery:

The effective role of the state in economic transformations. At all stages of the reforms, the country's administrative apparatus adequately responded to the tasks of economic modernization.
Substantial labor resources. The demand in the Chinese labor market is always greater than the supply. This keeps wages low while productivity is high.
Attracting foreign investment in the Chinese industry, as well as in high-tech industries.
An export-oriented development model, which made it possible, at the expense of foreign exchange earnings, to increase the science intensity of the economy and the development of the latest technologies.

However, China's main economic progress has been to move away from shock therapy and gradually build a market mechanism that has revitalized the economy through effective market regulation.

China today

What have four decades of wise reforms in China led to? Let's consider the main indicators of the economy further. Today's China is a powerful nuclear and space power with a modern industry and developed infrastructure.

Few numbers

In three quarters of 2017, China's GDP reached about 60 trillion yuan. This amounts to 6.9% in annual terms. The increase in China's GDP in 2017 is 0.2% compared to the period last year. The share of the agricultural, industrial and service sectors in GDP is increasing by an average of 5-7%. In 2017, the growth trend of innovative and high-tech sectors of the economy continues.

In general, despite a slight slowdown in growth rates, the Chinese economy (it is rather difficult to briefly describe this phenomenon) today retains the potential for long-term growth and continues structural reforms.

Forecasts of the development of the Chinese economy

Having created a market mechanism in the economy, the Chinese government plans to further improve it, while showing the advantages of socialism. However, experts make both optimistic and pessimistic forecasts for the development of the Chinese economy. Some are confident that it will be difficult to confront the growing economic, political and social problems while maintaining communist power. The growing emigration to developed countries, the gap between the rich and the poor can reduce the effectiveness of state power and the role of the party. In contrast to them, other experts argue that, after all, a hybrid of socialism and the capitalist market is possible due to the originality of the Chinese nation and the mentality that is unique to it. It remains only to say that time will put everything in its place.

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Introduction

China is a state in Central and East Asia. The total area is 9 596 960 sq. km, land area - 9 326 410 sq. km, the area of rivers and lakes - 270 550 sq. km. China ranks first in the world in terms of population. The country's population currently exceeds 1.3 billion people.

China is a republic of 23 provinces, 5 autonomous regions, 4 cities of central subordination. The head of state is the president (elected by the National People's Congress for a 5-year term). The legislative body is the unicameral National People's Congress (2,979 seats - deputies are elected from municipal, regional and provincial people's assemblies for a 5-year term).

In the PRC, the land, its subsoil and industrial enterprises belong to the people, and only a small part of the state property is in the hands of private owners, therefore in China there are no large owners, and the main classes are peasants, workers, merchants and intellectuals.

China's economy is fueled by large mineral reserves. The country's largest deposits of coal and oil (mainly of the Mesozoic and Meso-Cenozoic periods) are concentrated in the north of China. Deposits of non-ferrous and rare metals, the largest of which is the tungsten deposit, which occupies the first place in the world in terms of size, are located within the South China massif, antimony, tin, mercury, molybdenum, manganese, lead, zinc, copper, etc. are also mined here. Also in China there are deposits of gold and other precious metals.

Industry plays an important role in the economy of China. At present, both traditional industries are developing in China - textile, coal, ferrous metallurgy, phosphorus and earthenware production, as well as new industries - oil production, oil refining, gas, chemical, aviation, space, electronic, mechanical engineering, instrument making. The country occupies a leading position in the world in the production of coal, cement, mineral fertilizers, steel, and electricity.

Considering the topic of China's economic miracle, I would like to first of all note that the rapid development of the economy could be observed not only in China, but also in Japan. Therefore, we should start by looking at the "Economic Miracle" with the general Asian model of the economy.

1. Factors, characteristic of the Asian model of the economy

If you explain Asia (China, Japan, etc.), you have to assume that they just save more each year. More savings means more growth. As the famous economist Paul Krugman said, prosperation not inspiration: it is just with their sweat, with their blood, they have achieved such good, such solid successes.

The Asian model is characterized by three factors:

The first one is high shares of savings in the economy and, thus, large savings.

The second factor is export orientation: none of these countries developed rapidly without very high export rates. Why export? First, it allows you to hire a lot of people - to pull out the labor force from agriculture, to redistribute it in the production and service sectors. Naturally, the most labor-intensive is export: rags, shoes, furniture, electronics, etc. - without this, you simply cannot do such a redistribution. Secondly, high export rates make it possible to import a lot, and if you look at these countries, there is a lot of imported stuff: raw materials, materials, engineering products - they themselves could not yet do this, they took all of this through export. So export is the second factor.

The third factor is the lack of democracy in the listed countries, starting with Japan. China, Korea, Taiwan, Singapore, Hong Kong, Thailand, Malaysia, Indonesia - none of these countries had a multi-party democracy during the entire period of high growth. There are, of course, heated debates: why this is so, what caused it. This can be interpreted in different ways. The first explanation is that democracy interferes with growth. For example, India, from the 1960s until recently, could not achieve what East Asia has achieved only because the political factor (democratic elections) was in the way. Philippines, sometimes Indonesia - the same thing.

It can be interpreted in another way: by the fact that they developed too quickly, and simply forgot about democracy, about liberal views, about political issues, calmed down by the fact that they are living very well and the economy is growing. At the same time, the Philippines and India have very low growth rates - everyone is preoccupied with other issues: the reallocation of resources, etc.

It should be noted that in all successful examples of high growth in Asia, the multiparty system is simply absent. It appeared much later, when they reached a fairly stable level of the middle class, then they all began to rapidly develop democracy.

On the other hand, it is worth noting that in all these countries there is a very stable and successful political system, a minimum of corruption (especially the so-called arbitrary), stable institutions, a business friendly environment - that is, the commercial environment was quite friendly towards new capital injections; commercial law, civil law, etc. are well developed. Economic growth and state in China / Lecture by Jonathan Anderson / 03 April 2008 lecture in the framework of the project "Public lectures" Polit.ru "

2. Formation of modern China

The early 1990s were marked by high rates of economic development. The expansion of the export-oriented private sector is helping China's rapid integration into the global economy.

Traditional economics. China's ancient agriculture began with the cultivation of forage grasses in the arid lands of the northern part of the country and the production of rice in humid subtropical regions in the lower Yangtze basin. The most common and numerous domestic animals were pigs. During the early Han Dynasty (206 BC - 9 AD), the Chinese invented some agricultural implements and agricultural methods that were used much later in Europe and the Middle East. Perhaps the most remarkable tool was a moldboard plow made of durable metal (the methods of smelting it were improved in the 3rd century BC). Among the new tools for rural labor was the multi-tube planter, which made furrows in the ground and planted seeds directly into the soil, thereby reducing unnecessary seed loss. The device, which was a winnower driven by a crank with fan-type blades, significantly reduced the cleaning time for threshed grain. During the reign of the Ming dynasty (1368-1644) and at the early stage of the Manchu Qing dynasty (1644-1912), the area of sown lands expanded, they were irrigated, and fertilizers were applied. Where better quality seeds were used and new crops introduced, mainly corn, higher yields were obtained. Undoubtedly, the most important factor in increasing yields was the improvement, construction and use of an extensive network of irrigation facilities. Almost half of these structures, which operated before the beginning of the 20th century, were built before 1500.

In the era of imperial China, many technical innovations were introduced into practice, including the process of smelting cast iron, and drilling of wells for the extraction of natural gas began. However, the equipment up to the end of the 19th century. was made in a handicraft way. Attempts to industrialize the country according to the European model have hardly led to serious results, except for the increase in coal production and the construction of railways. In 1911 the dynastic system collapsed, and the civil war and international conflicts delayed economic modernization.

Economic development: 1949-1990s. During the first three years of its existence, the PRC focused its main efforts on eliminating the destructive consequences of the civil war. The main emphasis was placed on the development of heavy industry and collectivization in agriculture. During the implementation of the first five-year plan (1953-1957), preference was given to the development of heavy industry (its output increased by 75%). However, Mao Zedong was not satisfied with the pace of economic growth and turned China on the path of "comprehensive industrialization" (the "Great Leap Forward" program). The idea was to mobilize the entire population of the country for intensive labor in order to achieve an increase in the output of agricultural and industrial products in a short time.

A key element of the program was the creation of “yard blast furnaces” to produce metal from low-grade local ore, scrap metal and even old kitchen utensils. Millions of peasants and urban workers, in accordance with instructions from above, were forced to abandon fields and factories in order to serve the "blast furnaces". While this program has resulted in total iron and steel smelting in China exceeding that of the UK metallurgy industry in just a few years, economic confusion and waste of natural resources, including clear logging for charcoal, and ultimately account - the most severe hunger. According to some reports, the famine in 1959-1961 claimed nearly 30 million lives.

In 1960, the Soviet Union stopped providing aid to China and withdrew its technical specialists from the country. At the same time, China received aid (including wheat for people dying of hunger) from Western countries, including Canada and Australia. Between 1961 and 1965, the recovery of the Chinese economy was carried out under the more pragmatic policies of Deng Xiaoping and Liu Shaoqi. The growth of the gross volume of industrial production exceeded 17% per year, and the situation in agriculture returned to normal. The reasons for the success were the use of highly qualified personnel in production management, the application of scientific achievements and the introduction of a wage system.

The development of the "pragmatic bias" was interrupted by the beginning in 1966 and continuing for approx. 10 years so-called "The great proletarian cultural revolution." All schools were closed, detachments of young people and adolescents, who enjoyed the support of the army and called themselves hungweipings ("red guards"), set out to defeat all the "right" - the enemies of Mao Zedong. In addition to the devastation inflicted on the intellectual and cultural life of China, the "Cultural Revolution" has seriously undermined the foundations of the Chinese economy. The industrial administration, government agencies and the Communist Party itself lacked many qualified personnel. The volume of foreign trade fell sharply. Despite the fact that after 1967 the army regained control of the situation to some extent, unrest and chaos continued until the failed military coup in 1971.

When Mao Zedong stepped back from active political leadership of the country, Deng Xiaoping and Zhou Enlai tried to return China to a strategy of balanced economic development. However, these efforts were thwarted by the factional opposition activities of the party leaders who came to power during the Cultural Revolution. The era of fear and suffering ended only with the death of Mao Zedong in 1976.

Throughout this period, the implementation of the five-year plans continued, with an unwavering emphasis on the development of heavy industry and huge expenditures on the army. After 1978, power in the country passed to Deng Xiaoping. Achievement of his goal - a fourfold increase in the power of the Chinese economy by 2000 - required both a sharp increase in the efficiency of agricultural production and a comprehensive restructuring of industry.

The first of these tasks would have been unthinkable without the reform, which was effectively completed by 1984 and provided a significant increase in the production of basic food products. Industrial reforms began by encouraging small businesses. Their successes allowed for the gradual elimination of the imbalance between production volumes in heavy and light industries and led to the growth of the service sector. In the period 1979-1988, China was second only to South Korea in terms of average annual economic growth.

As the state moves away from rigid centralization of management, private enterprise is taking an ever stronger position in the economy. The share of state-owned enterprises in industrial production is declining (from 80% in 1978 to 34% in 1998), while the share of private enterprises continues to grow and in 1998 amounted to more than 12%.

Since 1991, the volume of foreign trade began to increase. In 2002, the gross domestic product (GDP) grew by 8%. By the beginning of 1997, the volume of foreign investment in the Chinese economy exceeded $ 40 billion. GDP in China in 1980-1990 grew by an average of 10.2%, from 1990 to 1997 its growth was the highest in the world - 11.9%, and in 1998 it was approx. 8% .- 9% Materials of an open lecture at the Baikal Institute of Business and International Management \ Professor of the Department of Oriental Studies at MGIMO Sergei Luzyanin

3 . Economic miracleOf China

One of the most important events in world economic history in the last quarter of the 20th century was the unprecedented success of the Chinese economy.

Now let's make a comparison of what happened at the beginning of the reform period (late 70s - 80s) with China, which exists now. 25 years ago we saw the classical socialist system of economy and society. Almost the entire economy is state-owned: collective farms, services and manufacturing, manufacturing, industry - almost everything is in the hands of the government (approximately 85 - 90%). The profit was distributed only by the government. All enterprises are only budgetary. This is a familiar topic for Russian economists. Couldn't allocate resources on their own. Prices were all set by the state at the federal and local levels. It was very difficult for private property to compete: there was no free entry into the economy, they were not allowed to develop independently. There was no way out either: the unprofitable enterprise was willingly subsidized, there was a redistribution, no one was closed during this period; bank loans and lending - only according to the distribution of central or local authorities, five-year plans existed in every detail; investment and new construction - only by order of the government. This is a classic version, and 25 - 30 years ago it was all. Economic growth and state in China / Lecture by Jonathan Anderson / 03 April 2008 lecture in the framework of the project "Public lectures" Polit.ru "

Now let's contrast this with what is in China now (in the middle of this decade). Of course, there are still a lot of state-owned enterprises, there are tens of thousands of them, but they no longer make up 80 - 90% of the economy - they make up 25 - 30%. The rest is either privatized or pseudo-privatized enterprises with a fairly large share of private ownership, or it is simply a private economy that has been developing for 20 years. Almost all agriculture is in private hands, and for a long time. A significant part of heavy industry exists as state-owned enterprises. The light industry is almost entirely in the hands of either private owners or foreigners. The same is true for small services (restaurants, cars, etc.).

The next thing: profit is already distributed only by enterprises, the state no longer plays a role - it collects taxes, and the rest is done independently by the accounting departments of enterprises. Prices are almost never set by the state in China. Energy - yes: gas, oil, electricity, local city services. Everything else (if we talk about ordinary goods, ordinary services) is already determined by the market, and not by the state.

China opened a free entrance to the economy not only for its own people, but also for foreigners. Today, not only can one invest in almost every industry, but they do it willingly, and competition not only from private property and foreigners, but also from state-owned enterprises. If you go to Indonesia, the Philippines, Brazil - everything is there according to the old scheme: 1-2 large units that process oil, 1-2 large airlines, a unified electricity production network, steel - 3 large factories - a very monopolized environment typical for emerging markets. In China, nothing of the kind. There are 20 airlines, all state-owned, but they compete fiercely with each other, and without subsidies from the government. There are almost thousands of steel factories. There are dozens of electricity producers. Telecommunications is also a lot of competition, many companies. There is no monopolization at all in China. The one and only example of something that is not yet subject to competition is the railroad. Next year they will privatize it and break it apart.

As for the exit, in the 80s they did not even look at the economic results: if you are unprofitable - please, we subsidize, we will give it, we will figure it out. In the mid-90s, this was no longer the case. The statistics are known: from 1996 to 2001, China closed - just barely closed - tens of thousands of state-owned enterprises, fired almost 30 million state workers within five years and sent them home. Of course, in percentage terms, this is not half of the total workforce in China, but still 30 million is more than it works in all of Korea. And they all went to the private sector, the state did not suit them for a new job. Since then, it has been very clear to everyone: a really unprofitable enterprise is immediately subject to closure and sale.

In general, the entire system of resource redistribution has changed. If 20-30 years ago the five-year plan looked like a book, today it is a small documentary that sets out only general parameters of macroeconomics. There are no sectoral balances anymore, there are no more mandatory plans. Even the largest investment sectoral projects are now not subject to approval either at the central or at the local level.

I would like to pay attention to figures and charts, which will prove that the Economic Miracle is a long-term strategy for the development of China.

From the beginning of economic reforms in 1978 to 1997, the gross domestic product of this country increased by 5.7 times, or by 9.6% on average per year (graph 1). This means that it has doubled at a record rate - every 7.5 years!

Over the past 19 years, the production of GDP per capita in China has increased 4.4 times, labor productivity (GDP per person employed) - 3.6 times (Table 1). Over the same years, Russia's GDP decreased by 30%.

Table 1. Economic growth in China and Russia

While the development trends that have developed in the last decade persist in the Chinese economy in the near future, and even with a significant acceleration of economic growth in Russia (up to 4-5% annually), no later than 2005, China has already surpassed Russia in terms of GDP per capita ( graph. 2).

Chart 2. Growth of general indicators

There are several hypotheses trying to explain the Chinese miracle. Bulletin on Problems of Economic and Social Policy March 25, 1998 \ Institute for Economic Analysis Moscow

4 ... Explaining the China Economic Miracle

Hypothesis 1 - backwardness.

It is argued that the Chinese economy is growing so rapidly because the level of development in China was low and the growth rate of the underdeveloped countries is higher than that of the more developed countries.

Graph 3. Level of development and rates of economic growth in 1979-1996 (209 countries)

Hypothesis 2 - features of the structure of production.

It is argued that the structure of the Chinese economy - a low share of industry and a high share of agriculture - has made a decisive contribution to the acceleration of economic growth.

In fact, contrary to widespread misconceptions, the share of industry in GDP in China was not lower, but higher than in Russia (Table 2). However, the lower share of industry in Russia did not contribute to an increase in the rate of its economic growth. Conversely, China's higher score did not slow its growth rate relative to Russia.

Table 2. Sectoral structure of the economy,%

Indicators

Total GDP, including:
Agriculture and forestry

Services sector
All employed, incl .:
Agriculture and forestry
Industry and construction
Services sector

Hypothesis 3 - features of the structure of employment.

It is argued that the higher growth rates in China are explained by the high share of the agricultural population at the beginning of the reforms (Table 2).

Graph 4 shows that the rate of economic growth does not depend on the structure of the employed population. With the share of people employed in agriculture at a level close to 70.5% (China in 1978), the values of the average annual rates of economic growth in different countries range from -6.0% to + 8.2%. Consequently, the structure of employment does not explain the high rate of economic growth in China.

Graph 4. Share of people employed in agriculture

Hypothesis 4 - national specifics.

If this were the case, then China would be distinguished by high rates of economic development throughout its history. However, during the first three quarters of the 20th century, the Chinese economy had very low growth rates, which periodically turned negative. Until recently, China was one of the poorest countries in the world, and the real threat of hunger was eliminated only a few years ago. In 1952-1978. GDP per capita in China decreased both in relation to Russian and in relation to the world average (Table 3, graph 5).

Table 3. GDP per capita at PPP in 1993 yen

Indicators	Before the start of reforms in China	Since the beginning of reforms in China

In dollars. USA



% With the world



% To Russia

Graph 5. GDP per capita in China in% of Russia in 1952-1978.

Hypothesis 5 - the nature of economic policy.

Therefore, it seems quite obvious that the success of the Chinese economy is due to the applied model of economic reform. In contrast to Russia, where liberal reforms (the so-called shock therapy) were allegedly carried out, in China the reforms were of a gradual (gradualist) nature. Unlike Russia, where the state "withdrew" from the economy, in China the state retained significant control over the economy, and its role in economic development has increased markedly. Bulletin on Problems of Economic and Social Policy March 25, 1998 \ Institute for Economic Analysis Moscow

The Malaysian media published an article stating that the majority of Chinese people believe that due to the implementation of the course of economic reform in the country initiated by Deng Xiaoping, China is performing economic miracles. A variety of economic and systemic reforms are fueling China's booming economic growth. China is not the only country that has transitioned from a planned economy to a market economy. In the late 1980s and early 1990s, the former USSR and the countries of Eastern Europe changed their communist direction. But none of these countries have made such big changes as China.

First, China's economic reform path is gradual. For the first time, economic liberalization began in certain places, and such an experiment lasted for some time. When the planned result was obtained, this experiment was disseminated throughout the country and the corresponding changes were made as necessary. This contributed to the implementation of reform policies and increased the likelihood of success.

Second, starting the implementation of the policy of economic reform in China, the political structure is preserved and does not change. The government fully supports the introduction of the reform policy to ensure its successful implementation.

Third, China's economic reform is built on long-term work. After 1949, China established an effective, incorruptible and multi-tiered government under the leadership of the Communist Party. A peaceful and honest working society has been formed, which is essential for the economic development of the country.

Finally, after the policy of economic reform, China began to carefully implement certain macroeconomic policies. International Radio \ Malaysian Media 09: 13.26 / 11/2008

Types of economic reforms

5. The nature of economic policy in China and Russia

Employment policy. During the first two years of economic reforms in China, the share of employed in the public sector fell from 94.9% to 26.6%. By 1995, it had dropped to 18.9%. After six years of economic reforms in Russia, the share of employed in the public sector remains higher than in China after two years of reforms and is almost twice as high as in China at present (Table 4). Bulletin on Problems of Economic and Social Policy March 25, 1998 \ Institute for Economic Analysis Moscow

Table 4. Employment policy, social policy

Indicators

Share in the number of employed,%:

Employed in the state administration
Share of the population of persons receiving benefits and subsidies from the state budget,%
Social security spending as% of GDP
Unemployment rate, %

The share of people employed in the state administration increased in both countries: in China over 17 years - by 40%, in Russia over 6 years - by 90%. At present, the Russian indicator is 2.6 times higher than the Chinese one, and after the reduction in the number of the administrative apparatus in China by 4 million people, announced at the last session of the NPC, it will exceed it by four times.

Social politics. The share of people receiving benefits, subsidies and subsidies from the state budget is quite low in China and at the beginning of the reforms, was subsequently reduced by half. In contrast, the share of people receiving financial support from the budget in Russia, and at the beginning of the reforms exceeded the Chinese level by more than four times, over the past 6 years has increased by another 16%. Now the gap in these indicators between Russia and China is eightfold.

Thanks to both a decrease in the number of people receiving budget support and a decrease in the average benefit per person, the total spending on social security and consumer subsidies in China fell from 4.0% to 0.9% of GDP. In contrast, social spending in Russia not only did not decrease, but also increased significantly - from 6.3 to 12.6% of GDP. Now the gap in these indicators between Russia and China has grown to fourteen times.

As a result of reduced spending on unemployment benefits in China, incentives for registering able-bodied citizens as unemployed have noticeably decreased. The unemployment rate almost halved, from 5.3% to 2.9%, and the share of the employed in the entire population rose from 42.3% in 1978 to 53% in 1997, which contributed to the acceleration of economic development. Due to the increase in social spending in Russia, incentives for the participation of able-bodied citizens in productive activities have noticeably decreased. Largely due to this, the unemployment rate increased from 2.6% in 1991 to 9% in 1997, while the share of the employed in the total population fell from 49.7% to 44.4%. The decline in the number of employed and their share in the total population contributed to the deepening of the economic crisis in Russia.

Foreign economic policy. The liberalization of foreign economic activity in China led to a reduction in the actual levied import customs duties from 17.7% of the volume of imports in 1978 to 2.5% in 1996. In contrast, in Russia there was a transition from a relatively liberal foreign trade policy to protectionism - - the ratio of import duties to total imports increased from 0.7% in 1992 to 5.3% in 1997 (Table 5)

Table 4. Foreign economic policy and its results

Indicators

Import duties in% of import
*Growth rate,%*
Export
Import
*% Of GDP*
Export
Import
Share of machinery and equipment in exports,%

China practically did not use such an instrument of protectionist policy as the devaluation of the national currency. Average annual rate of depreciation of the exchange rate in 1979-1997 (8.3%) were quite moderate. In contrast, the average annual rate of depreciation of the exchange rate in Russia was almost 12 times higher.

The result of the liberal foreign economic policy in China was an increase in the annual growth rate of foreign trade from 2-3% in 1978 to 17-20% in 1996 and an increase in the share of exports and imports in GDP from 5-6% on the eve of reforms to 15 -17% in 1996. The volume of Chinese exports in 18 years has grown 15.2 times, imports - 12.5 times. The inflow of foreign direct investment into the Chinese economy increased from 0.11% of GDP in 1978 to 5.08% of GDP in 1997. Increased participation of China in the international division of labor contributed to an increase in its rates of economic growth.

The strengthening of protectionism in foreign economic policy in Russia led to a decrease in the annual growth rate of exports and imports from 7-9% in 1994-1995. up to 0.5-3.8% in 1997. As a result, the ratio of exports and imports to GDP in 1997 (22-28%) turned out to be at a level close to that of 1990 (26-37%). In recent years, there has been an increase in direct investment in the Russian economy, however, their volumes even in 1997. remain an order of magnitude lower than foreign investment in the Chinese economy.

Money-credit policy. During the entire period of reforms, the Chinese authorities pursued a very restrained monetary policy. Average annual growth rates of loans from the National Bank of China in 1992-1997 did not exceed 15%, and the average annual growth rate of the money supply minus the growth rate of real GDP was 17.3%. As a result, the average annual inflation rate in China was just over 10%, and its negative impact on economic development was negligible (Appendix 2).

In contrast, the Russian monetary authorities in 1991-1995. carried out an extremely expansionist policy. Average annual growth rates of loans from the Central Bank of Russia for the period 1992-1997 amounted to 200%, the average annual growth rate of the money supply minus the growth rate of real GDP - 255%. As a result, the average annual inflation rate reached 435%, which contributed to a sharp decline in real production.

Budgetary policy. Relatively low inflation rates in China were achieved thanks to moderate growth rates of the money supply, which, in turn, were due to restrained lending by the National Bank. Moderate lending was maintained due to the insignificant budget deficit. Its value was reduced from 5.1% of GDP in 1979 to 1.2% of GDP in 1981 and then during the entire period of reforms remained within the range of 1.4-2.2% of GDP.

The Chinese authorities carried out an unprecedented tax cut in world economic practice - from 30.4% of GDP in 1979 to 10.3% of GDP in 1996.The tax cut resulted in a decrease in all government revenues - from 31.3% of GDP to 1979 to 11.5% of GDP in 1996

The colossal reduction in government revenues did not cause destabilizing macroeconomic consequences only because at the same time and even at a faster rate, there was a radical reduction in all government spending - from 36.4% of GDP in 1979 to 13.1% of GDP in 1996.

Almost all components of expenditures were cut, but in particular expenditures on investments, subsidies, grants, defense, the national economy, and social security (Graph 6, Appendix 3).

Chart 6. Government expenditures by items as% of GDP in China

Government consumption was reduced from 15.2% to 10.6% of GDP. In the structure of general public expenditures, central government expenditures (tm) were cut most sharply from 20.7% of GDP in 1979 to 3.8% of GDP in 1996. , also very impressive sizes - from 15.7 to 8.3% of GDP.

6. The nature of economic reforms in China and Russia

Thus, the main reason for the accelerated development of China is the nature of the economic policy pursued. Contrary to widespread misconceptions in 1979-1997. in China, not gradual (gradualist), but liberal economic reforms were carried out. At the same time, the degree of liberality and radicalism of the reforms carried out in China, apparently, has no analogues in world history. The result of the implementation in practice of the liberal economic model was an unprecedented reduction in the scale of the state burden in all areas, which provided the Chinese economy with record growth rates.

Compared to the Chinese, the Russian reforms turned out to be much more inconsistent, gradual (gradualistic). The degree of government intervention in the economy turned out to be incomparably higher than in China. There were no liberal reforms in Russia. In the late 1980s and the first half of the 1990s, there was not a reduction, but a sharp increase in the state burden, which led the Russian economy to an acute crisis.

Liberal economic policies in China have provided not only phenomenal economic results - they have contributed to significant improvements in all indicators of human development. The growing state burden on the economy in Russia was accompanied by a relative and absolute deterioration of these indicators (Table 5).

Table 5. Human Development Indicators

Indicators
	Change for 1978-1995	Change for 1978-1995
Average life expectancy, years
Infant mortality rate per 1000 births
Literacy rate of the population,%
The number of students in universities per 10 thousand people.
UN Human Development Index

In 1997, Russia managed to achieve a certain reduction in the scale of state intervention in the economy, which contributed to the end of the recession, the beginning of economic growth and some improvement in human development indicators. Nevertheless, the size of the state burden on the Russian economy at the beginning of 1998 still exceeds the capabilities of the domestic economy, as well as similar indicators of China not only in recent years, but also on the eve of economic reforms (Appendix 3).

Maintaining such a level of state burden does not allow expecting high and stable rates of economic growth, slows down the social and human development of the country. The experience of Chinese reforms shows that only an extremely liberal economic policy is capable of stopping Russia's growing lag behind its neighbors and other countries of the world.

7. Present and future of China's economy

2002 marked the 50th anniversary of the development of the PRC's economy on the basis of national economic plans. During this period, nine five-year plans were fulfilled (at present, the tenth is being carried out). In the 50s and 70s, China underwent a transition to a planned economy, in the 80s and 90s, under the conditions of reforms and openness, economic development accelerated and the PRC has been the world leader in terms of sustainability of GDP growth for more than 20 years.

In 1991-2001, China's GDP increased more than 5 times (in current prices) and in 2002, according to estimates, will exceed 10 trillion. yuan (an increase in current prices 30 times compared to 1978). High rates of GDP growth were achieved due to the effective combination of the principles of planned regulation with market methods based on a socialist planned economy, including the centralized determination of the rates and proportions of the development of the national economy.

In 2010, compared to 2001, it is planned to double the GDP, including by expanding the PRC's participation in the world economy. According to the plan for the 10th five-year plan (2001-2005), the average annual growth rate of the PRC economy will be about 7% (in 2000 prices). The volume of GDP in 2005 will reach 12.5 trillion. yuan (9.4 thousand per capita).

The growth rate of the Chinese economy over the past 10 years has averaged over 10% per year. In 2006, China's GDP, according to the State Committee for Development and Reforms of the PRC, reached 20 trillion. yuan (2.5 trillion dollars.), an increase of 10.5%. According to the National Bureau of Statistics, this is the highest rate since 1995, when it was 10.9%. Investors have recently shown more and more interest in China. More than half of the capital investments directed to the countries of Asia from the USA and Western Europe come from China.

Despite impressive economic growth rates, the Chinese government believes that one of the main problems of the country's economy is a huge trade surplus. So, in 2006, China sold abroad goods and services for 177.47 billion dollars more than it acquired. At the same time, the main articles of import are oil and other raw materials, while China exports mainly goods. The volume of exports from the country in 2006 amounted to just under a trillion dollars. In 2005, the country's trade surplus amounted to $ 102 billion.

China is currently a member of the World Trade Organization (WTO) and is increasingly integrating into<мировую экономику. География экспорта Китая - США 22%, Гонконг 19%, Япония 17%. География импорта Китая - Япония 20%, США 12%, Тайвань 12%, Южная Корея 10%. География импорта - Япония 20%, США 12%, Тайвань 12%, Южная Корея 10%, Германия, Гонконг, Россия и Сингапур.

In the next 20 years, China's economy has a real chance of becoming the second largest in the world, after the United States. The standard of living will reach that registered at the present stage for the average resident of the Republic of Korea or Portugal. The manufacturing industry in China is gradually moving to the forefront and becoming more and more capital intensive. The researchers note that even with the transition to the production of more and more complex industrial products, for example, to semiconductor technology and information technology equipment, by which China has managed to become the world's 3rd largest manufacturer, China does not lose its advantages in producing such a relatively cheap and labor intensive products like toys, textiles and shoes.

Research group "Morgan Stanley" believes that by 2020, China's GDP should increase to 10 trillion. dollars (at the dollar rate registered at the end of 2000), i.e. China's economy will be about the same size as the American one at present. Per capita income will reach $ 6,700. If the reforms in the PRC are carried out faster than envisaged by the agreements with the WTO (in particular, due to increased pressure from foreign partners), then GDP growth may increase in 2006-2015. up to 10% per year, and the volume of GDP will reach 10 trillion. dollars already by 2015. Morgan Stanley Research Group Conclusions

Conclusion

China at the beginning of the XXI century is a space and nuclear power. The building of a market economy is being carried out in China under the leadership of the Communist Party on the basis of five-year plans. The economy remains diversified. With high rates of economic growth (14.2% in 1992, 7.8% in 1998), it has an extensive character. In 1995, fearing overheating of the economy, the management decided to restrain growth within 8-9%. GNP per capita in 1999 reached $ 780. With a high share of foreign investment, almost 80% of all foreign investors in the economy of the PRC are ethnic Chinese (huaqiao) living abroad.

According to the aggregate GDP - 4 trillion. dollars - China is the third economy in the world after the US with 13.5 trillion. and Japanese with 7.2 trillion. In terms of gold and foreign exchange reserves, the country is in first position - 1.7 trillion. dollars. In terms of foreign trade, the PRC is in the third position - 2.1 trillion. dollars. The United States is China's largest partner. The trade turnover of the two countries is 640 billion dollars (for comparison: the maximum indicator of Russian-Chinese trade is 48.2 billion). China has crushed America with its aggressive dominant exports. Trade surplus with the USA - $ 280 billion. It is an economic ice rink that travels across the N American continent. And since China is a WTO member, there is nothing the Americans can do about it.

In 2010, according to the CPC's plans, China should catch up with the United States in terms of total GDP (currently, according to some estimates, the PRC's economy makes up 45% of the US economy, however, some experts consider this figure to be overestimated).

Annex 1

Types of economic reforms

Directions of economic policy	Indicators	The value of indicators depending on the type of economic reforms

		Gradual (Gradual, with significant government intervention)	Liberal (fast, so-called shock therapy)
1.Policy of employment	Share in the total number of employed
	Employed in the public sector
	Employed in the state administration
2.Social policy	Social subsidies as% of GDP
	The proportion of people receiving benefits and subsidies from the state. budget, in the total population
3.Foreign economic policy

4 monetary policy	Average annual rate
	Increase in Central Bank loans
	%: - growth of money supply
5 budgetary policy
	Government taxes
	Government expenditures, including:
	Government subsidies
	Government consumption
	Budget deficit
	State debt

Appendix 2

The nature of economic policy in China and Russia

Direction of economic policy	Indicators	Average annual values of indicators in 1992-1997

1.Social policy	Social subsidies as% of GDP
2.Foreign economic policy	Import duties in% of import volume
	Average annual rate of depreciation of the exchange rate,%
3. Monetary policy
	Increase in Central Bank loans
	Growth in money supply minus growth in real GDP
4 budgetary policy
	Government taxes
	Government spending
	Incl. central government spending
	Government spending on the economy and subsidies
	Government consumption
	Budget deficit
	State debt
Economic policy results	Inflation rate,%
	Unemployment rate, %
	Growth rate,%
	Export

	Foreign investment as% of GDP
	Growth rates of real GDP,%

Appendix 3

Public finance indicators as% of GDP

Indicators	The beginning of reforms	Latest year for which data are available
		Russia 1992	Russia 1997	Difference between China and Russia
Budget deficit
Government revenues
Incl. tax revenues
Total government expenditures, including:
Governance, court, order and security, international activities

Education, healthcare, science, culture, including:
Education
Health care

Economy and subsidies
Social Security
Public debt service

Central government spending
Regional government spending
Government consumption
State debt
For reference: Average annual GDP growth rates,%

Bibliography

economy china asian model

1. Economic growth and state in China / Lecture by Jonathan Anderson / 03 April 2008 lecture in the framework of the project "Public lectures" Polit.ru "

2. Materials of an open lecture at the Baikal Institute of Business and International Management \ Professor of the Department of Oriental Studies at MGIMO Sergei Luzyanin

3. Bulletin on the problems of economic and social policy March 25, 1998 \ Institute for Economic Analysis Moscow

4. International Radio \ Malaysian Media 09: 13.26 / 11/2008

5. Conclusions of the research group "Morgan Stanley"

6. World Economy: Textbook / Ed. Prof. A.S. Bulatov. - M .: Jurist, 2002.

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Feature of the Chinese

The fact that they are willing to work, and showing diligence during all working hours, and often non-working hours. They know how to adapt to difficult and even impossible working conditions, taking them as the norm. In China, even in large cities, you can see a man squatting in a public garden at lunchtime and eating hot plastic noodles. Nobody pays attention to this, because work is important for the Chinese, and everything else is unimportant, and you can be patient and endure. The explanation for such fanatical diligence is quite simple. After many years of the Chinese Cultural Revolution, poverty and hunger, the population fears poverty in panic, so every generation passes on all the horrors of the past to growing children who try their best to hold on to any job with regular pay.

There are many factories in China where fifteen-year-old girls work

Workers at the plant are full-time workers, and when the bell rings for lunch, they walk in straight columns into the room, where there are mugs, in which tea or a hot lunch is then brewed. The next call is given 15-20 minutes later, and again the same picture: silence, strictly one after another, the "workers" return to the performance of their duties. The parents of these girls consider themselves happy, because their children work, receive a good salary and live in a dormitory at the factory. They take such young girls because these almost still children have rather sensitive fingertips, which is required when assembling various mini electronic devices. Each such worker has only a short period of stay in such a production, from 2-3 years, because then a lot of stress, increased attention, constant activity associated with the sensitivity of the fingers leads to atrophy of this functional feature, and those who are out of order are replaced by others ...

The Chinese are subconsciously ready for any kind of hard work.

Where there is the smallest opportunity and chance to earn and have a steady income. The Chinese Communist Party, not seeing the possibility of increasing the country's income at the expense of domestic demand, opened up the opportunity for the arrival of foreign capital. Many leading European fashion houses very quickly moved, first partially their production lines, and then completely. For example, "Prado" began to be "sewn" exclusively in China. This happened due to the fact that the phenomenon of cheap labor was so attractive that the state quickly turned into a unique factory for the production of any product.

When visiting factories in China, it is surprising how many goods can be made in 24 hours by the diligent workers of this country. In the production of goods, any wishes of the customer are taken into account, and no matter what level and rank he is. Any inscription can be made on the packaging of the goods, up to the fact that this product was produced at the home address of the customer, and all this because the Chinese remember very well that time is money!

There is a view

The fact that Chinese goods are always not of high quality, however, those who have visited this country have seen the mass production of unique, elite goods. It's just that quite often low-grade goods are imported to Russia, moreover, by our compatriots. Therefore, speaking about the low quality of the product can be very conditional. The Chinese are also famous for the fact that in record time they are ready to make a 100% identical copy of the product, which can be sold several times cheaper than its original. A recent confirmation of this is the created almost identical copy of the car of the famous American concern. Moreover, as everyone knows, it is practically useless to conduct legal proceedings over copyright with the Chinese side. Such is the special economic miracle.

Hard work and desire to survive

Explains the large-scale migration flows of the Chinese around the world. The fact is that the Chinese authorities once adopted a registration law, which immediately divided all citizens into peasants and urban residents of the country, and according to this provision, anyone born into a peasant's family has the status of a peasant resident.

Such a tough regime time does not allow peasants to count on getting higher education. For peasants, who represent 65% of the total population in the country, there are great restrictions in obtaining pension insurance, insurance payments for medical treatment and other types of conventional social insurance. Such methods made many peasant families beggars, forcing them to drag out a miserable existence and be content with work for a penny remuneration.

China in recent years

Has undergone quite large and external changes. Impressive skyscrapers and hotel masterpieces were built, achievements of scientific and technological progress are being actively introduced, which are instantly copied and introduced into everyday life. High-speed Internet, available even in the metro, magnetic levitation trains, five-star hotel complexes, permanent international exhibitions and conferences - all this gives the impression of an actively developing state.

However, the official statistics of China say that 50% of all incomes of the population are concentrated in the hands of 10% of millionaires and billionaires, and the number of the poor is increasing every year. Therefore, the results of unprecedented rates of economic development are deposited in the pockets of billionaires, bringing more and more new profits.