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Rule of law and enforced property rights are everything. Absolutely everything. Ever wonder how China was able to emerge from decades of regressive economic an

Rule of law and enforced property rights are everything. Absolutely everything. Ever wonder how China was able to emerge from decades of regressive economic and industrial policies in a short span of time? International investors were willing to pour capital into post-Mao China because there was a strong central government presiding over an orderly society in which cheap labor was plentiful. Of course there were other factors that helped as well, like a cultural obsession with education that has generated a wellspring of human capital. Cheap labor is everywhere. Cheap labor and stability is rare.

alexasmyths 9y ago
"Ever wonder how China was able to emerge from decades of regressive economic and industrial policies in a short span of time? International investors were willing to pour capital into post-Mao China because there was a strong central government presiding over an orderly society in which cheap labor was plentiful. " Whaaaaaa? No, no. 'Foreign Investment' was not the reason China did well in the 1980's forward. In fact, China is still kind of a sketchy 'investment' as there is no transparency in accounting, you do not have effectively the 'rule of commercial law' because senior gov. officials are corrupt etc.. You have the opposite: companies invest heavily, and suddenly find themselves trapped in a bureaucratic dead end, while a government-backed competitor leapfrogs them. China was able to redevelop in the 1980's because they chose to end the decades of Maoist Communist / Centrally Planned insanity. The colonial interventions, and post revolution years are seen as a 'blip' in Chinese history wherein they were held back. What see now in China is simply a 'return to the norm'. Not really a new development. "Rule of law and enforced property rights are everything. Absolutely everything." They are critical, I agree but they are not quite everything. As for the article, I might tend to agree with their points - we can do much better than dump money into dysfunctional systems where the money only amplifies the dysfunction.
- RingwormOne 9y ago
  That was not always the case. The government used to be much friendlier and accommodating towards foreign business. In order to kickstart their Renaissance, the Chinese almost entirely relied on foreign capital. You make the claim that because China was strong in the past it magically should be expected to return to strength in the future, and that foreign capital or not, such a rejuvenation would be inevitable. That's magical thinking. As I said, yes a strong cultural heritage has greatly helped the Chinese, but the initial spark and driving force during much of the 80s and 90s was foreign capital investment.
  - alexasmyths 9y ago
    It's not magical to assume that the Chinese are as capable of managing their economies roughly just as everyone else. The basic rules for managing an economy are well known - all you have to do is follow them. If you do this - you'll get a minimum level of GDP/wealth etc. just like Poland, Mexico, Serbia or wherever.
    - RingwormOne 9y ago
      Of course they're capable. That's apparent. But a strong capital base does not fall into a nation's lap simply because its people are capable. The Chinese had very little capital, then over the course of the 80's built it up. How? Through direct investment. They were given the investment because investors recognized that Chinese commitment to property rights and stability.

alexasmyths 9y ago

"Ever wonder how China was able to emerge from decades of regressive economic and industrial policies in a short span of time? International investors were willing to pour capital into post-Mao China because there was a strong central government presiding over an orderly society in which cheap labor was plentiful. " Whaaaaaa? No, no. 'Foreign Investment' was not the reason China did well in the 1980's forward. In fact, China is still kind of a sketchy 'investment' as there is no transparency in accounting, you do not have effectively the 'rule of commercial law' because senior gov. officials are corrupt etc.. You have the opposite: companies invest heavily, and suddenly find themselves trapped in a bureaucratic dead end, while a government-backed competitor leapfrogs them. China was able to redevelop in the 1980's because they chose to end the decades of Maoist Communist / Centrally Planned insanity. The colonial interventions, and post revolution years are seen as a 'blip' in Chinese history wherein they were held back. What see now in China is simply a 'return to the norm'. Not really a new development. "Rule of law and enforced property rights are everything. Absolutely everything." They are critical, I agree but they are not quite everything. As for the article, I might tend to agree with their points - we can do much better than dump money into dysfunctional systems where the money only amplifies the dysfunction.

RingwormOne 9y ago
That was not always the case. The government used to be much friendlier and accommodating towards foreign business. In order to kickstart their Renaissance, the Chinese almost entirely relied on foreign capital. You make the claim that because China was strong in the past it magically should be expected to return to strength in the future, and that foreign capital or not, such a rejuvenation would be inevitable. That's magical thinking. As I said, yes a strong cultural heritage has greatly helped the Chinese, but the initial spark and driving force during much of the 80s and 90s was foreign capital investment.
- alexasmyths 9y ago
  It's not magical to assume that the Chinese are as capable of managing their economies roughly just as everyone else. The basic rules for managing an economy are well known - all you have to do is follow them. If you do this - you'll get a minimum level of GDP/wealth etc. just like Poland, Mexico, Serbia or wherever.
  - RingwormOne 9y ago
    Of course they're capable. That's apparent. But a strong capital base does not fall into a nation's lap simply because its people are capable. The Chinese had very little capital, then over the course of the 80's built it up. How? Through direct investment. They were given the investment because investors recognized that Chinese commitment to property rights and stability.