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As an Indian, I am always pleased to see the advances China is making in all facets of life. It shows that another model of development is possible - and one ne

As an Indian, I am always pleased to see the advances China is making in all facets of life. It shows that another model of development is possible - and one need not blindly follow the American individualist/"free markets" model. In fact, one of the reason why we see an immediate influx of anti-China comments in any such article is driven by fear (possibly at a subconscious level) that the Chinese model actually works.

narrator 9y ago
There is also the Chinese model of finance. The Economist has been predicting a Japanese style financial crash in China due to enormous debt levels since at least the early 90s and it never happened. That's because money is electronically printed by the government and given to banks in exchange for bad loans on a regular basis. There is no debt default crisis. The banks just keep lending and no government debt is created like it would be in America if the government wanted to do the same thing. That this whole system has worked so well for 30 years completely undermines the entire basis of western macroeconomics and is the equivalent of telling a traditionally trained economist that the earth orbits the sun while they believed the opposite. It just does not compute and they can't even wrap their heads around it. Thus they keep predicting an imminent economic collapse every years even though they've been wrong for more than 25 years.
- rushabh 9y ago
  This model works because China run a huge trade surplus, and its excess production is consumed by other countries. It would be interesting to see if this model can continue when the global trade balances out. In a way China is subsidizing goods for the most of the world. The outcome is the kind of political problems this is causing in most countries.
- cjalmeida 9y ago
  It's not because it didn't happen yet that economists (or economic theory) are wrong. Chinese economy is growing so fast that they can essentially bail out banks (silently) whenever they want and have little impact on the budget. It should be interesting to see how it develops when the economic eventually slows down and China is no longer the cheap manufacturing park of the world. 25y is nothing. Japan went like that for 40y, from the end of WW2 to laye 80s. Until it stopped and never recovered since. Fortunately they stopped at a high income level. A more interesting history is that of Argentina. It was an export powerhouse that went from being a poor Spanish colony in early 1800s to having a per capita income as high as Germany or France in 1920s. After the crash all went downhill and income levels are back to mid levels.
- yusuke10 9y ago
  Just because the collapse hasn’t happened publicly doesn’t mean it won’t happen or it hasn’t happened. China can’t escape economic gravity, the same way Soviet Union didn’t escape gravity when it collapsed, even though everything was ok state owned. Checkout Chinese provinces lying about inflating 25-30% of revenue, overstating their constant 7% gdp growth, debt ratio of over 300%, massive capital outflow, their own economists warning of a crash, and many others To see just how bad their crash will be
- seanmcdirmid 9y ago
  > The Economist has been predicting a Japanese style financial crash in China due to enormous debt levels since at least the early 90s and it never happened. Huh? No they haven't. Especially since Japan was still crashing in the early 90s, it was hardly an established precedent by then. > That's because money is electronically printed by the government and given to banks in exchange for bad loans on a regular basis. Japan did the same thing, it led to zombie companies and a lost decade. > There is no debt default crisis. The banks just keep lending and no government debt is created like it would be in America if the government wanted to do the same thing. You see how this can't work forever, right? Also, if SOE's are publicly owned and their loans are implicitly guaranteed by the government, how is that not considered government debt? > Thus they keep predicting an imminent economic collapse every years even though they've been wrong for more than 25 years. It hasn't been 25 years, and whatever, China has crashed a few times since the early 90s. I remember seeing half completed buildings in Tianjin in 1999 just standing out as husks. I know, I know, you think "its different this time" or "its different for china", but its all BS in the end, because it never is.
chibg10 9y ago
In what way, other than in name, is China not following the individualist/"free markets" model?
- majos 9y ago
  I agree that China is pretty capitalist, but state-owned enterprises strike me as pretty non-free-market.
  - chibg10 9y ago
    I don't think there's a person in the world arguing that China's economic success is due to its SOEs.
    - sct202 9y ago
      I think that the SOE have at least built up a lot of infrastructure (power, transportation) that has benefited independent companies. A lot of that would have made it much harder for non-SOE companies to be competitive.
    - majos 9y ago
      "Due to" is a strong word, but as sct202 mentions it does seem to me like SOEs made it easier for other non-SOE companies to grow. For example, it's easier to build a bunch of cities if you have a bunch of steel manufacturing SOEs pumping out supply at a loss. At any rate, that's beside my point, which is that (whether or not they're useful) the existence of huge SOEs by definition isn't classical capitalism, no?
- k__ 9y ago
  lol, yes. They became successful after getting more individualist.
seagullz 9y ago
In fact you didn't really have to look up to China to show that. Reading up the first dozen or so pages of "Bad Samaritans" by Cambridge economist Ha-Joon Chang would reveal how South Korea is a fairly contemporary counterexample to the (largely mythical) official narrative; also worth taking a look at his paper "Kicking away the ladder: the "real" history of free trade"[0]. [0] http://www.personal.ceu.hu/corliss/CDST_Course_Site/Readings_old_2012_files/Ha-Joon%20Chang%20-%20Kicking%20Away%20the%20Ladder-The%20%E2%80%9CReal%E2%80%9D%20History%20of%20Free%20Trade.pdf http://www.personal.ceu.hu/corliss/CDST_Course_Site/Readings...
- aaron-lebo 9y ago
  Correct me if I'm wrong, but the reason South Korea (like China) progressed so rapidly is because it was a fairly authoritarian state until recently. They benefited from that and US investment, and then liberalized after they were a small powerhouse. Some argue that China will do the same thing, but it's just as likely the elites continue to hoard most of the benefits of this development and it stays closed off. Trading personal freedoms for economic development is temping and very scary because it's tempting.
  - seagullz 9y ago
    Generally speaking, the dichotomy involving "personal freedom" vs. "economic development" does not have to be inevitable if the political consciousness and the relevant constructive action on the part of the people concerned is there. So what ends up happening in China or elsewhere depends on the choices made there, though as outsiders we can speculate. Ha-joon Chang was not advocating to trade personal freedom for economic development; he was explaining what really transpired, contrary to the official narrative on economic development.
    - aaron-lebo 9y ago
      Ok, understood. Disagree that there is an "official narrative" about free trade/economic development (we never got a copy of that at my school), nor that a focus on free trade alone accounts for what's happened there. It does look like an interesting paper. Thanks.
deleted 9y ago
[deleted]
yusuke10 9y ago
> anti-China comments in any such article is driven by fear (possibly at a subconscious level) that the Chinese model actually works. Lol sure it works....until you're one of the citizen being tortured by the government. I can't believe how greedy these scientists are. As if Einstein should have worked for the Nazis. "China 'holding at least 120,000 Uighurs in re-education camps'" https://www.theguardian.com/world/2018/jan/25/at-least-120000-muslim-uighurs-held-in-chinese-re-education-camps-report https://www.theguardian.com/world/2018/jan/25/at-least-12000... "In China, the Brutality of ‘House Arrest’" https://www.nytimes.com/2017/11/25/opinion/in-china-the-brutality-of-house-arrest.html https://www.nytimes.com/2017/11/25/opinion/in-china-the-brut... "Liu Xiaobo, Chinese Dissident Who Won Nobel While Jailed, Dies at 61" https://www.nytimes.com/2017/07/13/world/asia/liu-xiaobo-dead.html https://www.nytimes.com/2017/07/13/world/asia/liu-xiaobo-dea... "Report: China still harvesting organs from prisoners at a massive scale" https://www.cnn.com/2016/06/23/asia/china-organ-harvesting/index.html https://www.cnn.com/2016/06/23/asia/china-organ-harvesting/i...
- mastax 9y ago
  The economic model is somewhat separable from the political model. Development in South Korea, Taiwan, Japan followed broadly similar lines - direct state support for large industrial conglomerates - while being less totalitarian. If that model is actually superior (even for developed economies) then there is going to be a painful transition, and The West will fall behind in the meantime. Change is fear. And yeah it sucks that China can do terrible things to its citizens, but I still think most of the negative sentiment toward China is economic. The sample size is small but successful empires from history always value their own success over the lives of foreigners. In that sense it doesn't matter if China is 'evil' or not - 'we' are not Chinese - it only matters if they are powerful enough that their self interest can cause significant harm.
  - raisspen 9y ago
    I envy China for their willingness to invest lots of effort in moving forward and innovating. I would never live there because I don't feel that throwing away all notions of privacy is worth it. The totalitarian aspect of the Chinese government along with some territorial disputes are the only real sense of negative feelings most people I know have towards China.
wyager 9y ago
China’s historical attempts at strong forms of collectivism universally resulted in poverty, starvation, and an absence of societal progress. Read about the history of Chinese capitalist SEZs and how they propped up and formed the model for the modern Chinese economy.
rushabh 9y ago
Unlike China, India has a very weak nationalism. The "Chinese Dream" is very much the American Dream redux. Countries that have made great progress have always had a strong nationalistic spirit, may it be Britain, Japan or the United States and now China. Though nationalism is on the rise in India, it is still a very fractured society, with a strong emphasis on autonomy of groups to make their own "rules", treating the state as a weak actor. The quality of education at all levels is shockingly poor (specially in science and technology) and no way ready to produce any kind of revolution. While India will make painfully slow progress in the physical sense (infrastructure), it is very unlikely to follow the Chinese model. Sadly India will remain fractured (or de-centralized, if you want to put a positive spin). If you have been to India, you will know the pervasiveness of "status quo". Things are so broken, hard and complex that it does not make sense to even start doing something.
- trextrex 9y ago
  If we are making statements based on history, you are squarely ignoring the progress that happened in Europe in spite of it being very "fragmented". Some argue that it was this competition between various nation states that pushed development faster ahead. Yes, I'm aware that India is a single country, while Europe wasn't. But with the right amount of autonomy, you end up with the same conditions, and it's not too different in practice.
  - rushabh 9y ago
    Unlike the European states, Indian states are do not have a long running political history or national "myth". They have been formed based on linguistic similarity and for ease of administration. And they are not homogeneous either, hence there are multiple movements in place for further fragmentation (most of which are justified). Also these states (or ancient / medieval kingdoms in them) have rarely been "at war" with each other. Until recently, India was sparsely populated and it was easy the "migrate" to another land to establish your kingdom rather than fight with your brother or cousin. If you are interested, Francis Fukuyama [1] has a very interesting theory that says that India has been held together by its society and not its state. Multiple waves of invasion have not fundamentally altered the texture of the society, parts of the new culture have been slowly assimilated in it, often forcing the invaders to adapt to their new home. [1] https://en.wikipedia.org/wiki/The_Origins_of_Political_Order https://en.wikipedia.org/wiki/The_Origins_of_Political_Order
odiroot 9y ago
After visiting China (and admittedly only knowing US from opinions on the Internet/HN) I'm willing to say the society is much closer to the USA than Central European states. The chase after the buck, cult of success and celebrities, car-heavy cities. Also cars as status symbols. The concentration of power in the central government isn't really that visible. I agree with you second claim. There's recently really a strange deluge of anti-Chinese comments, even here on HN. My guess it stems from ignorance.
- merpnderp 9y ago
  Mass internment of political activists or minority populations, horrific treatment of any who disagree with the state, hard to ignore evidence of widespread abuse of organ harvesting, and you are confounded by people having problems with China?
d0100 9y ago
> Chinese model actually works Model of what? China does have the advantage that any dictatorship has: the country goes on any direction with full force. Of course, it's all at the expense of the individual, their rights, liberty and life. The benevolent dictator is only benevolent until he isn't.

narrator 9y ago

There is also the Chinese model of finance. The Economist has been predicting a Japanese style financial crash in China due to enormous debt levels since at least the early 90s and it never happened. That's because money is electronically printed by the government and given to banks in exchange for bad loans on a regular basis. There is no debt default crisis. The banks just keep lending and no government debt is created like it would be in America if the government wanted to do the same thing. That this whole system has worked so well for 30 years completely undermines the entire basis of western macroeconomics and is the equivalent of telling a traditionally trained economist that the earth orbits the sun while they believed the opposite. It just does not compute and they can't even wrap their heads around it. Thus they keep predicting an imminent economic collapse every years even though they've been wrong for more than 25 years.

rushabh 9y ago
This model works because China run a huge trade surplus, and its excess production is consumed by other countries. It would be interesting to see if this model can continue when the global trade balances out. In a way China is subsidizing goods for the most of the world. The outcome is the kind of political problems this is causing in most countries.
cjalmeida 9y ago
It's not because it didn't happen yet that economists (or economic theory) are wrong. Chinese economy is growing so fast that they can essentially bail out banks (silently) whenever they want and have little impact on the budget. It should be interesting to see how it develops when the economic eventually slows down and China is no longer the cheap manufacturing park of the world. 25y is nothing. Japan went like that for 40y, from the end of WW2 to laye 80s. Until it stopped and never recovered since. Fortunately they stopped at a high income level. A more interesting history is that of Argentina. It was an export powerhouse that went from being a poor Spanish colony in early 1800s to having a per capita income as high as Germany or France in 1920s. After the crash all went downhill and income levels are back to mid levels.
yusuke10 9y ago
Just because the collapse hasn’t happened publicly doesn’t mean it won’t happen or it hasn’t happened. China can’t escape economic gravity, the same way Soviet Union didn’t escape gravity when it collapsed, even though everything was ok state owned. Checkout Chinese provinces lying about inflating 25-30% of revenue, overstating their constant 7% gdp growth, debt ratio of over 300%, massive capital outflow, their own economists warning of a crash, and many others To see just how bad their crash will be
seanmcdirmid 9y ago
> The Economist has been predicting a Japanese style financial crash in China due to enormous debt levels since at least the early 90s and it never happened. Huh? No they haven't. Especially since Japan was still crashing in the early 90s, it was hardly an established precedent by then. > That's because money is electronically printed by the government and given to banks in exchange for bad loans on a regular basis. Japan did the same thing, it led to zombie companies and a lost decade. > There is no debt default crisis. The banks just keep lending and no government debt is created like it would be in America if the government wanted to do the same thing. You see how this can't work forever, right? Also, if SOE's are publicly owned and their loans are implicitly guaranteed by the government, how is that not considered government debt? > Thus they keep predicting an imminent economic collapse every years even though they've been wrong for more than 25 years. It hasn't been 25 years, and whatever, China has crashed a few times since the early 90s. I remember seeing half completed buildings in Tianjin in 1999 just standing out as husks. I know, I know, you think "its different this time" or "its different for china", but its all BS in the end, because it never is.

chibg10 9y ago

In what way, other than in name, is China not following the individualist/"free markets" model?

majos 9y ago
I agree that China is pretty capitalist, but state-owned enterprises strike me as pretty non-free-market.
- chibg10 9y ago
  I don't think there's a person in the world arguing that China's economic success is due to its SOEs.
  - sct202 9y ago
    I think that the SOE have at least built up a lot of infrastructure (power, transportation) that has benefited independent companies. A lot of that would have made it much harder for non-SOE companies to be competitive.
  - majos 9y ago
    "Due to" is a strong word, but as sct202 mentions it does seem to me like SOEs made it easier for other non-SOE companies to grow. For example, it's easier to build a bunch of cities if you have a bunch of steel manufacturing SOEs pumping out supply at a loss. At any rate, that's beside my point, which is that (whether or not they're useful) the existence of huge SOEs by definition isn't classical capitalism, no?
k__ 9y ago
lol, yes. They became successful after getting more individualist.

seagullz 9y ago

In fact you didn't really have to look up to China to show that. Reading up the first dozen or so pages of "Bad Samaritans" by Cambridge economist Ha-Joon Chang would reveal how South Korea is a fairly contemporary counterexample to the (largely mythical) official narrative; also worth taking a look at his paper "Kicking away the ladder: the "real" history of free trade"[0]. [0] http://www.personal.ceu.hu/corliss/CDST_Course_Site/Readings_old_2012_files/Ha-Joon%20Chang%20-%20Kicking%20Away%20the%20Ladder-The%20%E2%80%9CReal%E2%80%9D%20History%20of%20Free%20Trade.pdf http://www.personal.ceu.hu/corliss/CDST_Course_Site/Readings...

aaron-lebo 9y ago
Correct me if I'm wrong, but the reason South Korea (like China) progressed so rapidly is because it was a fairly authoritarian state until recently. They benefited from that and US investment, and then liberalized after they were a small powerhouse. Some argue that China will do the same thing, but it's just as likely the elites continue to hoard most of the benefits of this development and it stays closed off. Trading personal freedoms for economic development is temping and very scary because it's tempting.
- seagullz 9y ago
  Generally speaking, the dichotomy involving "personal freedom" vs. "economic development" does not have to be inevitable if the political consciousness and the relevant constructive action on the part of the people concerned is there. So what ends up happening in China or elsewhere depends on the choices made there, though as outsiders we can speculate. Ha-joon Chang was not advocating to trade personal freedom for economic development; he was explaining what really transpired, contrary to the official narrative on economic development.
  - aaron-lebo 9y ago
    Ok, understood. Disagree that there is an "official narrative" about free trade/economic development (we never got a copy of that at my school), nor that a focus on free trade alone accounts for what's happened there. It does look like an interesting paper. Thanks.

deleted 9y ago

[deleted]

yusuke10 9y ago

> anti-China comments in any such article is driven by fear (possibly at a subconscious level) that the Chinese model actually works. Lol sure it works....until you're one of the citizen being tortured by the government. I can't believe how greedy these scientists are. As if Einstein should have worked for the Nazis. "China 'holding at least 120,000 Uighurs in re-education camps'" https://www.theguardian.com/world/2018/jan/25/at-least-120000-muslim-uighurs-held-in-chinese-re-education-camps-report https://www.theguardian.com/world/2018/jan/25/at-least-12000... "In China, the Brutality of ‘House Arrest’" https://www.nytimes.com/2017/11/25/opinion/in-china-the-brutality-of-house-arrest.html https://www.nytimes.com/2017/11/25/opinion/in-china-the-brut... "Liu Xiaobo, Chinese Dissident Who Won Nobel While Jailed, Dies at 61" https://www.nytimes.com/2017/07/13/world/asia/liu-xiaobo-dead.html https://www.nytimes.com/2017/07/13/world/asia/liu-xiaobo-dea... "Report: China still harvesting organs from prisoners at a massive scale" https://www.cnn.com/2016/06/23/asia/china-organ-harvesting/index.html https://www.cnn.com/2016/06/23/asia/china-organ-harvesting/i...

mastax 9y ago
The economic model is somewhat separable from the political model. Development in South Korea, Taiwan, Japan followed broadly similar lines - direct state support for large industrial conglomerates - while being less totalitarian. If that model is actually superior (even for developed economies) then there is going to be a painful transition, and The West will fall behind in the meantime. Change is fear. And yeah it sucks that China can do terrible things to its citizens, but I still think most of the negative sentiment toward China is economic. The sample size is small but successful empires from history always value their own success over the lives of foreigners. In that sense it doesn't matter if China is 'evil' or not - 'we' are not Chinese - it only matters if they are powerful enough that their self interest can cause significant harm.
- raisspen 9y ago
  I envy China for their willingness to invest lots of effort in moving forward and innovating. I would never live there because I don't feel that throwing away all notions of privacy is worth it. The totalitarian aspect of the Chinese government along with some territorial disputes are the only real sense of negative feelings most people I know have towards China.

wyager 9y ago

China’s historical attempts at strong forms of collectivism universally resulted in poverty, starvation, and an absence of societal progress. Read about the history of Chinese capitalist SEZs and how they propped up and formed the model for the modern Chinese economy.

rushabh 9y ago

Unlike China, India has a very weak nationalism. The "Chinese Dream" is very much the American Dream redux. Countries that have made great progress have always had a strong nationalistic spirit, may it be Britain, Japan or the United States and now China. Though nationalism is on the rise in India, it is still a very fractured society, with a strong emphasis on autonomy of groups to make their own "rules", treating the state as a weak actor. The quality of education at all levels is shockingly poor (specially in science and technology) and no way ready to produce any kind of revolution. While India will make painfully slow progress in the physical sense (infrastructure), it is very unlikely to follow the Chinese model. Sadly India will remain fractured (or de-centralized, if you want to put a positive spin). If you have been to India, you will know the pervasiveness of "status quo". Things are so broken, hard and complex that it does not make sense to even start doing something.

trextrex 9y ago
If we are making statements based on history, you are squarely ignoring the progress that happened in Europe in spite of it being very "fragmented". Some argue that it was this competition between various nation states that pushed development faster ahead. Yes, I'm aware that India is a single country, while Europe wasn't. But with the right amount of autonomy, you end up with the same conditions, and it's not too different in practice.
- rushabh 9y ago
  Unlike the European states, Indian states are do not have a long running political history or national "myth". They have been formed based on linguistic similarity and for ease of administration. And they are not homogeneous either, hence there are multiple movements in place for further fragmentation (most of which are justified). Also these states (or ancient / medieval kingdoms in them) have rarely been "at war" with each other. Until recently, India was sparsely populated and it was easy the "migrate" to another land to establish your kingdom rather than fight with your brother or cousin. If you are interested, Francis Fukuyama [1] has a very interesting theory that says that India has been held together by its society and not its state. Multiple waves of invasion have not fundamentally altered the texture of the society, parts of the new culture have been slowly assimilated in it, often forcing the invaders to adapt to their new home. [1] https://en.wikipedia.org/wiki/The_Origins_of_Political_Order https://en.wikipedia.org/wiki/The_Origins_of_Political_Order

odiroot 9y ago

After visiting China (and admittedly only knowing US from opinions on the Internet/HN) I'm willing to say the society is much closer to the USA than Central European states. The chase after the buck, cult of success and celebrities, car-heavy cities. Also cars as status symbols. The concentration of power in the central government isn't really that visible. I agree with you second claim. There's recently really a strange deluge of anti-Chinese comments, even here on HN. My guess it stems from ignorance.

merpnderp 9y ago
Mass internment of political activists or minority populations, horrific treatment of any who disagree with the state, hard to ignore evidence of widespread abuse of organ harvesting, and you are confounded by people having problems with China?

d0100 9y ago

> Chinese model actually works Model of what? China does have the advantage that any dictatorship has: the country goes on any direction with full force. Of course, it's all at the expense of the individual, their rights, liberty and life. The benevolent dictator is only benevolent until he isn't.